Did Hedge Funds Drop The Ball On Coherus Biosciences Inc (CHRS) ?

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Coherus Biosciences Inc (NASDAQ:CHRS).

Is Coherus Biosciences Inc (NASDAQ:CHRS) a buy, sell, or hold? The best stock pickers are in a bearish mood. The number of bullish hedge fund positions were cut by 3 recently. Our calculations also showed that CHRS isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Clint Carlson, Carlson Capital

We’re going to go over the fresh hedge fund action regarding Coherus Biosciences Inc (NASDAQ:CHRS).

How have hedgies been trading Coherus Biosciences Inc (NASDAQ:CHRS)?

At the end of the fourth quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the second quarter of 2018. By comparison, 15 hedge funds held shares or bullish call options in CHRS a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


More specifically, Rubric Capital Management was the largest shareholder of Coherus Biosciences Inc (NASDAQ:CHRS), with a stake worth $27.6 million reported as of the end of December. Trailing Rubric Capital Management was Citadel Investment Group, which amassed a stake valued at $19.9 million. Hound Partners, Carlson Capital, and Adage Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

Due to the fact that Coherus Biosciences Inc (NASDAQ:CHRS) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds who were dropping their full holdings heading into Q3. It’s worth mentioning that Samuel Isaly’s OrbiMed Advisors dropped the biggest position of the “upper crust” of funds followed by Insider Monkey, worth close to $28.4 million in stock. Thomas Steyer’s fund, Farallon Capital, also dropped its stock, about $11.6 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 3 funds heading into Q3.

Let’s now take a look at hedge fund activity in other stocks similar to Coherus Biosciences Inc (NASDAQ:CHRS). We will take a look at Central Securities Corporation (NYSE:CET), Care.com Inc (NYSE:CRCM), Tuniu Corporation (NASDAQ:TOUR), and GMS Inc. (NYSE:GMS). All of these stocks’ market caps resemble CHRS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CET 2 14038 -1
CRCM 17 174305 -2
TOUR 5 33046 2
GMS 20 97296 -4
Average 11 79671 -1.25

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 $80 million. That figure was $107 million in CHRS’s case. GMS Inc. (NYSE:GMS) is the most popular stock in this table. On the other hand Central Securities Corporation (NYSE:CET) is the least popular one with only 2 bullish hedge fund positions. Coherus Biosciences Inc (NASDAQ:CHRS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on CHRS as the stock returned 60.8% and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

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