The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Seres Therapeutics Inc (NASDAQ:MCRB) .
Seres Therapeutics Inc (NASDAQ:MCRB) was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. MCRB has experienced a decrease in hedge fund interest recently. There were 17 hedge funds in our database with MCRB positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as NN, Inc. (NASDAQ:NNBR), First Financial Corp (NASDAQ:THFF), and Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL) to gather more data points.
Follow Seres Therapeutics Inc. (NASDAQ:MCRB)
Follow Seres Therapeutics Inc. (NASDAQ:MCRB)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s go over the fresh action surrounding Seres Therapeutics Inc (NASDAQ:MCRB).
How have hedgies been trading Seres Therapeutics Inc (NASDAQ:MCRB)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 24% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in MCRB heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, David E. Shaw’s D E Shaw has the number one position in Seres Therapeutics Inc (NASDAQ:MCRB), worth close to $6.5 million, accounting for less than 0.1% of its total 13F portfolio. The second most bullish fund is Jim Simons’ Renaissance Technologies, with a $3.6 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish comprise George McCabe’s Portolan Capital Management, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Michael Hintze’s CQS Cayman LP. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually dumped their positions entirely. At the top of the heap, Roberto Mignone’s Bridger Management dumped the biggest stake of the 700 funds followed by Insider Monkey, valued at an estimated $18.1 million in stock, and Principal Global Investors’s Columbus Circle Investors was right behind this move, as the fund cut about $10.7 million worth of Seres Therapeutics Inc (NASDAQ:MCRB) shares.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Seres Therapeutics Inc (NASDAQ:MCRB) but similarly valued. These stocks are NN, Inc. (NASDAQ:NNBR), First Financial Corp (NASDAQ:THFF), Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL), and Movado Group, Inc (NYSE:MOV). This group of stocks’ market values are closest to MCRB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NNBR | 7 | 46591 | 1 |
| THFF | 5 | 7444 | 0 |
| AOSL | 15 | 50869 | 3 |
| MOV | 19 | 50691 | 0 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $25 million in MCRB’s case. Movado Group, Inc (NYSE:MOV) is the most popular stock in this table. On the other hand First Financial Corp (NASDAQ:THFF) is the least popular one with only 5 bullish hedge fund positions. Seres Therapeutics Inc (NASDAQ:MCRB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MOV might be a better candidate to consider taking a long position in.
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