In this article we are going to use hedge fund sentiment as a tool and determine whether Instil Bio, Inc. (NASDAQ:TIL) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Instil Bio, Inc. (NASDAQ:TIL) was in 14 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 21. TIL investors should pay attention to a decrease in activity from the world’s largest hedge funds lately. There were 21 hedge funds in our database with TIL positions at the end of the first quarter. Our calculations also showed that TIL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Peter Kolchinsky of RA Capital Management
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Do Hedge Funds Think TIL Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in TIL over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Albert Cha and Frank Kung’s Vivo Capital has the number one position in Instil Bio, Inc. (NASDAQ:TIL), worth close to $241.2 million, accounting for 10.4% of its total 13F portfolio. Sitting at the No. 2 spot is RA Capital Management, led by Peter Kolchinsky, holding a $94.1 million position; 1.5% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism consist of Julian Baker and Felix Baker’s Baker Bros. Advisors, Lei Zhang’s Hillhouse Capital Management and Srini Akkaraju and Michael Dybbs’s Samsara BioCapital. In terms of the portfolio weights assigned to each position Vivo Capital allocated the biggest weight to Instil Bio, Inc. (NASDAQ:TIL), around 10.44% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, setting aside 5.12 percent of its 13F equity portfolio to TIL.
Because Instil Bio, Inc. (NASDAQ:TIL) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there exists a select few fund managers who were dropping their positions entirely by the end of the second quarter. At the top of the heap, Israel Englander’s Millennium Management dropped the largest investment of the 750 funds watched by Insider Monkey, worth about $8.7 million in stock. Arthur B Cohen and Joseph Healey’s fund, Healthcor Management LP, also said goodbye to its stock, about $5 million worth. These transactions are interesting, as total hedge fund interest fell by 7 funds by the end of the second quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Instil Bio, Inc. (NASDAQ:TIL) but similarly valued. These stocks are Jack in the Box Inc. (NASDAQ:JACK), The Buckle, Inc. (NYSE:BKE), Manchester United PLC (NYSE:MANU), Mueller Industries, Inc. (NYSE:MLI), Uniti Group Inc. (NASDAQ:UNIT), Health Catalyst, Inc (NASDAQ:HCAT), and AeroVironment, Inc. (NASDAQ:AVAV). This group of stocks’ market caps resemble TIL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JACK | 29 | 227139 | -1 |
| BKE | 25 | 196951 | 3 |
| MANU | 12 | 31402 | -4 |
| MLI | 17 | 227384 | -3 |
| UNIT | 16 | 295669 | -1 |
| HCAT | 22 | 170687 | 2 |
| AVAV | 20 | 100604 | 4 |
| Average | 20.1 | 178548 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $179 million. That figure was $561 million in TIL’s case. Jack in the Box Inc. (NASDAQ:JACK) is the most popular stock in this table. On the other hand Manchester United PLC (NYSE:MANU) is the least popular one with only 12 bullish hedge fund positions. Instil Bio, Inc. (NASDAQ:TIL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TIL is 23.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 through November 5th and still beat the market by 3.1 percentage points. A small number of hedge funds were also right about betting on TIL as the stock returned 13% since the end of the second quarter (through 11/5) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
