Were Hedge Funds Right About Precigen, Inc. (PGEN)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Precigen, Inc. (NASDAQ:PGEN) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Precigen, Inc. (NASDAQ:PGEN) has experienced an increase in activity from the world’s largest hedge funds of late. Precigen, Inc. (NASDAQ:PGEN) was in 17 hedge funds’ portfolios at the end of March. The all time high for this statistic is 19. There were 11 hedge funds in our database with PGEN positions at the end of the fourth quarter. Our calculations also showed that PGEN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Bill Miller of Miller Value Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a glance at the recent hedge fund action encompassing Precigen, Inc. (NASDAQ:PGEN).

Do Hedge Funds Think PGEN Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 55% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PGEN over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Miller Value Partners, managed by Bill Miller, holds the number one position in Precigen, Inc. (NASDAQ:PGEN). Miller Value Partners has a $62.7 million position in the stock, comprising 1.6% of its 13F portfolio. The second most bullish fund manager is Iridian Asset Management, managed by David Cohen and Harold Levy, which holds a $50.7 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management, D. E. Shaw’s D E Shaw and Thomas E. Claugus’s GMT Capital. In terms of the portfolio weights assigned to each position Miller Value Partners allocated the biggest weight to Precigen, Inc. (NASDAQ:PGEN), around 1.62% of its 13F portfolio. Iridian Asset Management is also relatively very bullish on the stock, earmarking 0.86 percent of its 13F equity portfolio to PGEN.

With a general bullishness amongst the heavyweights, key money managers have jumped into Precigen, Inc. (NASDAQ:PGEN) headfirst. Millennium Management, managed by Israel Englander, established the most outsized position in Precigen, Inc. (NASDAQ:PGEN). Millennium Management had $2.6 million invested in the company at the end of the quarter. Kenneth Tropin’s Graham Capital Management also made a $2.1 million investment in the stock during the quarter. The following funds were also among the new PGEN investors: David Costen Haley’s HBK Investments, Cliff Asness’s AQR Capital Management, and Michael Johnston’s Steelhead Partners.

Let’s now take a look at hedge fund activity in other stocks similar to Precigen, Inc. (NASDAQ:PGEN). We will take a look at Tanger Factory Outlet Centers Inc. (NYSE:SKT), Alexander’s, Inc. (NYSE:ALX), IAMGOLD Corporation (NYSE:IAG), Upland Software Inc (NASDAQ:UPLD), Conduent Incorporated (NASDAQ:CNDT), Frontline Ltd (NYSE:FRO), and TriCo Bancshares (NASDAQ:TCBK). This group of stocks’ market values are closest to PGEN’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $145 million in PGEN’s case. IAMGOLD Corporation (NYSE:IAG) is the most popular stock in this table. On the other hand TriCo Bancshares (NASDAQ:TCBK) is the least popular one with only 6 bullish hedge fund positions. Precigen, Inc. (NASDAQ:PGEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PGEN is 71.2. 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 PGEN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PGEN were disappointed as the stock returned -21.5% 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.

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Disclosure: None. This article was originally published at Insider Monkey.