Although the hedge fund industry as a whole lost money in 2015, the top 20 hedge fund managers generated roughly $15 billion net of fees last year. Therefore, numerous investors continue to monitor hedgies’ moves as part of a broader stock selection and analysis process. But how do investors track hedge funds’ moves? A very commonplace practice is to keep a close eye on the abundant pool of 13D, 13G, and Form 4 filings, some of which may disclose valuable information for individual investors. For that reason, the following article will discuss five noteworthy filings identified by our team, which were submitted with the SEC by several successful money managers earlier this week.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
According to a Form 4 filing, Andreas Halvorsen’s Viking Global and its affiliates currently own 2.73 million shares of Editas Medicine Inc. (NASDAQ:EDIT). The filing revealed that 4.44 million shares of Series B Preferred Stock was automatically converted into 1.71 million shares of common stock in connection with the company’s initial public offering (IPO). At the same time, the Viking funds purchased 1.00 million shares at an IPO price of $16.00 and also acquired 20,407 shares at a price of $18.00 per share in open-market transactions after the IPO. Earlier this month, the genome editing company went public by selling 6.79 million shares of common stock, which included 885,000 greenshoe options. Editas Medicine Inc. (NASDAQ:EDIT) develops a proprietary genome editing platform based on a new technology called CRISPR/Cas9, which has the potential to make directed changes in DNA. The company’s most advanced research program aims at addressing a specific genetic form of progressive blindness named LCA10, while its tests have already shown that it is possible to successfully correct the LCA10 gene defect. Editas Medicine intends to start a clinical trial in 2017. In the meantime, Editas’ shares are trading visibly below the IPO price of $16.00, so individual investors could join the list of shareholders by paying a lower price than billionaire Halvorsen.
Let’s move on to the next two pages of this article, where we discuss four other filings submitted by reputable money managers monitored by our team.