The last 13F reporting period has passed and Insider Monkey has gone through 823 13F cases that well-known hedge funds and value investors are required to file by the SEC. The 13F documents show the portfolio positions of funds and investors as of June 30, when the S&P 500 index was trading around the 3100 level. Since the end of March, investors have decided to bet on the economic recovery and a stock market rebound. The S&P 500 Index has returned more than 50% since its bottom. In this article, you’ll find out if hedge funds were thinking of Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) was a good investment heading into Q3 and how the stock traded against top hedge fund picks.
Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) has seen an increase in the activity of the world’s largest hedge funds in recent months. Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) was listed in 19 hedge fund portfolios at the end of the second quarter of 2020. The all-time high in these statistics is 17. This means that the bullish number of hedge fund positions in this stock is currently at its highest level. There were 13 hedge funds in our database with AGLE holdings at the end of March. Our calculations also showed that AGLE is not one of the 30 most popular stocks among hedge funds (click for the Q2 leaderboard and watch the video for a quick overview of the top 5 stocks).
Video: Watch our video on the 5 most popular hedge fund stocks.
Why are we paying the least attention to hedge fund sentiment? Our research has shown that a select group of hedge funds have outperformed S&P 500 ETFs by 56 percentage points since March 2017 (see details here). We have also been able to identify in advance a select group of hedge funds that will significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they have lost 34% until August 17th. This is why we believe that hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
James E. Flynn of Deerfield Management
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, the Federal Reserve created trillions of dollars electronically to keep interest rates close to zero. We believe this will lead to inflation and raise house prices. So we check this junior gold mining stocks and we recommended it real estate to our monthly subscribers to our premium newsletter. We go through lists like the 10 most profitable companies around the world to choose the best large-cap stocks to buy. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can subscribe to our free daily newsletter at our website to get excerpts from those letters to your inbox. With that in mind, let’s take a look at the latest hedge fund action encompassing Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE).
How did the hedgies trade Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE)?
At the end of the second quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long on this stock, a change of 46% from the first quarter of 2020. On the other hand, there were a total of 16 hedge funds. with a bullish position on AGLE a year ago. With the whirlwind of hedge fund sentiment, there is a “top tier” of key hedge fund managers who are significantly increasing their holdings (or already building up large positions).
Among these funds, Baker Bros. Advisors held the largest stake in Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE), which was worth $ 40.5 million at the end of the third quarter. In second place was OrbiMed Advisors, which raised $ 37.1 million in stocks. Nantahala Capital Management, Adage Capital Management and Rock Springs Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders in the company. In terms of portfolio weights assigned to each position Samsara BioCapital assigned the largest weight to Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE), approximately 2.88% of its 13F portfolio. Capital of Soleus is also relatively very bullish on the stock, designating 1.95% of its 13F equity portfolio at AGLE.
As global interest increased, major hedge funds ventured into Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE) headlong. Samsara BioCapital, managed by Srini Akkaraju and Michael Dybbs, created the largest position in Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE). Samsara BioCapital had invested $ 8.9 million in the company at the end of the quarter. James E. Flynn Deerfield Management also initiated a $ 7.6 million position during the quarter. Other funds with new equity positions are Driehaus Capital by Richard Driehaus, Lion Point by Didric Cederholm and Sio Capital by Michael Castor.
Let’s also look at the activity of hedge funds in other stocks similar to Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE). We’ll take a look at Shoe Carnival, Inc. (NASDAQ:SCVL), The Marcus Corporation (NYSE:SCS), Personalis, Inc. (NASDAQ:PSNL), Cambridge Bancorp (NASDAQ:CATC), Puma Biotechnology Inc (NYSE:PBYI), PolyMet Mining Corp. (NYSE:PLM) and Caesarstone Ltd (NASDAQ:CSTE). The market capitalizations of this group of shares are similar to the market capitalization of AGLE.[table]Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position SCVL, 11.42872.0 MCS, 13.23237, -1 PSNL, 8.8562.3 CATC, 7.15350, – 2 PBYI, 18.96352, -2 PLM, 4.512.1 CSTE, 7.14471, -3 Medium, 9.7.28765, -0.6 [/table]
See the table here if you have formatting problems.
As you can see, these stocks had an average of 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $ 29 million. That figure was $ 199 million in the case of AGLE. Puma Biotechnology Inc (NYSE:PBYI) is the most popular action in this table. On the other hand, PolyMet Mining Corp. (NYSE:PLM) is the least popular with only 4 bullish hedge fund positions. Compared to these stocks, Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE) is more popular among hedge funds. Our overall hedge fund sentiment score for AGLE is 90. Stocks with a 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 have shown that top 10 most popular stocks among hedge funds, it returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and have consistently beaten the market by 19.3 percentage points. Unfortunately, AGLE was not as popular as these 10 stocks and the hedge funds betting on AGLE were disappointed as the stock returned -23.4% in the third quarter and underperformed the market. If you want to invest in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds, as most of these stocks have already outperformed the market in 2020.
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Disclosure: none. This article originally appeared on Monkey initiate.