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 at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of Danimer Scientific, Inc. (NYSE:DNMR).
Danimer Scientific, Inc. (NYSE:DNMR) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 30 hedge funds’ portfolios at the end of the second quarter of 2021. Our calculations also showed that DNMR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare DNMR to other stocks including Talend S.A. (NASDAQ:TLND), Sykes Enterprises, Incorporated (NASDAQ:SYKE), and Xenia Hotels & Resorts Inc (NYSE:XHR) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Einhorn of Greenlight Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. With all of this in mind we’re going to take a look at the latest hedge fund action encompassing Danimer Scientific, Inc. (NYSE:DNMR).
Do Hedge Funds Think DNMR Is A Good Stock To Buy Now?
At the end of June, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in DNMR a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, David Einhorn’s Greenlight Capital has the number one position in Danimer Scientific, Inc. (NYSE:DNMR), worth close to $52.8 million, accounting for 3.3% of its total 13F portfolio. The second largest stake is held by Iridian Asset Management, managed by David Cohen and Harold Levy, which holds a $39.1 million position; 0.7% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish comprise Paul Marshall and Ian Wace’s Marshall Wace LLP, Traci Lerner’s Chescapmanager LLC and Robert Richards’s Heathbridge Capital Management. In terms of the portfolio weights assigned to each position Heathbridge Capital Management allocated the biggest weight to Danimer Scientific, Inc. (NYSE:DNMR), around 7.64% of its 13F portfolio. Chescapmanager LLC is also relatively very bullish on the stock, designating 3.39 percent of its 13F equity portfolio to DNMR.
Because Danimer Scientific, Inc. (NYSE:DNMR) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there were a few hedge funds that decided to sell off their entire stakes heading into Q3. Intriguingly, David Cohen and Harold Levy’s Iridian Asset Management cut the largest stake of all the hedgies monitored by Insider Monkey, valued at an estimated $160.8 million in stock, and Parvinder Thiara’s Athanor Capital was right behind this move, as the fund said goodbye to about $45.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Danimer Scientific, Inc. (NYSE:DNMR). These stocks are Talend S.A. (NASDAQ:TLND), Sykes Enterprises, Incorporated (NASDAQ:SYKE), Xenia Hotels & Resorts Inc (NYSE:XHR), Quanterix Corporation (NASDAQ:QTRX), Organogenesis Holdings Inc. (NASDAQ:ORGO), Whiting Petroleum Corporation (NYSE:WLL), and Protagonist Therapeutics, Inc. (NASDAQ:PTGX). All of these stocks’ market caps match DNMR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TLND | 36 | 1058430 | -9 |
| SYKE | 19 | 245998 | 5 |
| XHR | 5 | 8153 | -1 |
| QTRX | 20 | 280102 | 1 |
| ORGO | 16 | 205787 | 4 |
| WLL | 24 | 283386 | 3 |
| PTGX | 27 | 723557 | 7 |
| Average | 21 | 400773 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $401 million. That figure was $310 million in DNMR’s case. Talend S.A. (NASDAQ:TLND) is the most popular stock in this table. On the other hand Xenia Hotels & Resorts Inc (NYSE:XHR) is the least popular one with only 5 bullish hedge fund positions. Danimer Scientific, Inc. (NYSE:DNMR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DNMR is 75.3. 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 24.9% in 2021 through October 15th and beat the market again by 4.5 percentage points. Unfortunately DNMR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DNMR were disappointed as the stock returned -42.4% since the end of June (through 10/15) 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.
