Adverum Biotechnologies, Inc. (ADVM): Hedge Funds Getting Back In?

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Adverum Biotechnologies, Inc. (NASDAQ:ADVM).

Is Adverum Biotechnologies, Inc. (NASDAQ:ADVM) ready to rally soon? The best stock pickers are in an optimistic mood. The number of long hedge fund bets went up by 3 lately. Our calculations also showed that ADVM isn’t among the 30 most popular stocks among hedge funds (see the video below). ADVM was in 15 hedge funds’ portfolios at the end of June. There were 12 hedge funds in our database with ADVM holdings at the end of the previous quarter.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Samuel Isaly Orbimed Advisors

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the fresh hedge fund action surrounding Adverum Biotechnologies, Inc. (NASDAQ:ADVM).

How are hedge funds trading Adverum Biotechnologies, Inc. (NASDAQ:ADVM)?

Heading into the third quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ADVM over the last 16 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

No of Hedge Funds with ADVM Positions

The largest stake in Adverum Biotechnologies, Inc. (NASDAQ:ADVM) was held by Renaissance Technologies, which reported holding $45.9 million worth of stock at the end of March. It was followed by venBio Select Advisor with a $41.6 million position. Other investors bullish on the company included Adage Capital Management, OrbiMed Advisors, and Polar Capital.

Now, key money managers were leading the bulls’ herd. venBio Select Advisor, managed by Behzad Aghazadeh, initiated the biggest position in Adverum Biotechnologies, Inc. (NASDAQ:ADVM). venBio Select Advisor had $41.6 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also made a $7.4 million investment in the stock during the quarter. The other funds with brand new ADVM positions are Brad Farber’s Atika Capital, Vishal Saluja and Pham Quang’s Endurant Capital Management, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Let’s also examine hedge fund activity in other stocks similar to Adverum Biotechnologies, Inc. (NASDAQ:ADVM). These stocks are Nova Measuring Instruments Ltd. (NASDAQ:NVMI), Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), Preferred Bank (NASDAQ:PFBC), and Oasis Midstream Partners LP (NYSE:OMP). This group of stocks’ market values resemble ADVM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NVMI 9 141351 -2
VNDA 18 226175 -1
PFBC 12 39406 1
OMP 5 15907 2
Average 11 105710 0

View table here if you experience formatting issues.

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 $106 million. That figure was $174 million in ADVM’s case. Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is the most popular stock in this table. On the other hand Oasis Midstream Partners LP (NYSE:OMP) is the least popular one with only 5 bullish hedge fund positions. Adverum Biotechnologies, Inc. (NASDAQ:ADVM) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately ADVM wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ADVM were disappointed as the stock returned -54.2% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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