Coming Out Of The Long Weekend On A High Note: Natera Inc (NTRA), Applied Genetic Technologies Corp (AGTC), and Columbia Pipeline Group Inc (CPGX)

Among the hedge funds that we track at Insider Monkey, Steve Cohen‘s Point72 Asset Management and Jacob Gottlieb‘s Visium Asset Management are the two largest stockholders of Applied Genetic Technologies Corp (NASDAQ:AGTC). Cohen added some 53,500 shares of the company to his fund’s holding during the first quarter to take its total stake to 1.03 million shares valued at $20.63 million. Gottlieb on the other hand acquired some 307,400 shares of Applied Genetic Technologies Corp (NASDAQ:AGTC) during the same period, taking his fund’s total stake to 1.0 million shares valued at $19.99 million. The two stakes represent 7.33% and 7.10% of the company’s outstanding common stock respectively. Another prominent stockholder of the firm is Israel Englander‘s Millennium Management, owning 504,400 shares valued at $10.08 million.

An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like a fund with the knowledge and resources of Visium can. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 80 percentage points and returning over 135%, while hedge funds themselves have collectively underperformed the market (read the details here).

Disclosure: None