Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Forte Biosciences, Inc. (NASDAQ:FBRX).
Is Forte Biosciences, Inc. (NASDAQ:FBRX) a worthy investment now? The smart money was buying. The number of long hedge fund bets inched up by 4 lately. Forte Biosciences, Inc. (NASDAQ:FBRX) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FBRX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 14 hedge funds in our database with FBRX positions at the end of the fourth quarter.
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Aaron Cowen of Suvretta Capital Management
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Do Hedge Funds Think FBRX Is A Good Stock To Buy Now?
At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards FBRX over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Forte Biosciences, Inc. (NASDAQ:FBRX) was held by Biotechnology Value Fund / BVF Inc, which reported holding $24.6 million worth of stock at the end of December. It was followed by Perceptive Advisors with a $23.5 million position. Other investors bullish on the company included Suvretta Capital Management, Point72 Asset Management, and Woodline Partners. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Forte Biosciences, Inc. (NASDAQ:FBRX), around 0.92% of its 13F portfolio. Suvretta Capital Management is also relatively very bullish on the stock, dishing out 0.3 percent of its 13F equity portfolio to FBRX.
As industrywide interest jumped, some big names have jumped into Forte Biosciences, Inc. (NASDAQ:FBRX) headfirst. Endurant Capital Management, managed by Vishal Saluja and Pham Quang, created the largest position in Forte Biosciences, Inc. (NASDAQ:FBRX). Endurant Capital Management had $0.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Forte Biosciences, Inc. (NASDAQ:FBRX) but similarly valued. These stocks are Riley Exploration Permian, Inc. (NYSE:REPX), Gritstone Oncology, Inc. (NASDAQ:GRTS), One Liberty Properties, Inc. (NYSE:OLP), FRP Holdings Inc (NASDAQ:FRPH), Atreca, Inc. (NASDAQ:BCEL), OncoCyte Corporation (NYSE:OCX), and Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA). This group of stocks’ market caps match FBRX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| REPX | 2 | 1130 | 1 |
| GRTS | 14 | 123364 | 4 |
| OLP | 8 | 29015 | 1 |
| FRPH | 6 | 31852 | -3 |
| BCEL | 17 | 163931 | 2 |
| OCX | 14 | 182958 | 8 |
| LTRPA | 21 | 126921 | 3 |
| Average | 11.7 | 94167 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.7 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $120 million in FBRX’s case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand Riley Exploration Permian, Inc. (NYSE:REPX) is the least popular one with only 2 bullish hedge fund positions. Forte Biosciences, Inc. (NASDAQ:FBRX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FBRX is 81.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately FBRX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FBRX were disappointed as the stock returned -11.6% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Forte Biosciences Inc. (NASDAQ:FBRX)
Follow Forte Biosciences Inc. (NASDAQ:FBRX)
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Disclosure: None. This article was originally published at Insider Monkey.
