We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards IVERIC bio, Inc. (NASDAQ:ISEE) and determine whether hedge funds skillfully traded this stock.
IVERIC bio, Inc. (NASDAQ:ISEE) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. IVERIC bio, Inc. (NASDAQ:ISEE) was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ISEE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
James E. Flynn of Deerfield Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s check out the new hedge fund action encompassing IVERIC bio, Inc. (NASDAQ:ISEE).
Do Hedge Funds Think ISEE Is A Good Stock To Buy Now?
At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 46% from the second quarter of 2021. By comparison, 26 hedge funds held shares or bullish call options in ISEE a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in IVERIC bio, Inc. (NASDAQ:ISEE) was held by Perceptive Advisors, which reported holding $121.3 million worth of stock at the end of September. It was followed by Avoro Capital Advisors (venBio Select Advisor) with a $115.3 million position. Other investors bullish on the company included Vivo Capital, Yiheng Capital, and Deerfield Management. In terms of the portfolio weights assigned to each position Commodore Capital allocated the biggest weight to IVERIC bio, Inc. (NASDAQ:ISEE), around 11.78% of its 13F portfolio. Acuta Capital Partners is also relatively very bullish on the stock, setting aside 6.5 percent of its 13F equity portfolio to ISEE.
As one would reasonably expect, key money managers have jumped into IVERIC bio, Inc. (NASDAQ:ISEE) headfirst. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, created the most valuable position in IVERIC bio, Inc. (NASDAQ:ISEE). Polar Capital had $25.1 million invested in the company at the end of the quarter. Christopher James’s Partner Fund Management also made a $18.5 million investment in the stock during the quarter. The following funds were also among the new ISEE investors: Richard Driehaus’s Driehaus Capital, Didric Cederholm’s Lion Point, and Efrem Kamen’s Pura Vida Investments.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as IVERIC bio, Inc. (NASDAQ:ISEE) but similarly valued. These stocks are Unisys Corporation (NYSE:UIS), Danaos Corporation (NYSE:DAC), Northwest Bancshares, Inc. (NASDAQ:NWBI), Aeva Technologies, Inc. (NYSE:AEVA), ICF International Inc (NASDAQ:ICFI), BTRS Holdings Inc. (NASDAQ:BTRS), and Ferro Corporation (NYSE:FOE). This group of stocks’ market valuations are closest to ISEE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UIS | 14 | 68704 | -3 |
| DAC | 16 | 159040 | -2 |
| NWBI | 13 | 22997 | 1 |
| AEVA | 9 | 288979 | -6 |
| ICFI | 11 | 31238 | 1 |
| BTRS | 28 | 279524 | 7 |
| FOE | 21 | 345777 | -2 |
| Average | 16 | 170894 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $171 million. That figure was $803 million in ISEE’s case. BTRS Holdings Inc. (NASDAQ:BTRS) is the most popular stock in this table. On the other hand Aeva Technologies, Inc. (NYSE:AEVA) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks IVERIC bio, Inc. (NASDAQ:ISEE) is more popular among hedge funds. Our overall hedge fund sentiment score for ISEE is 90. 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 and still beat the market by 3.6 percentage points. Unfortunately, ISEE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ISEE were disappointed as the stock returned -14.2% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Iveric Bio Inc. (NASDAQ:ISEE)
Follow Iveric Bio Inc. (NASDAQ:ISEE)
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Disclosure: None. This article was originally published at Insider Monkey.
