Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Cellectis SA (ADR) (NASDAQ:CLLS).
Cellectis SA (ADR) (NASDAQ:CLLS) was included in the equity portfolios of 10 funds from our database at the end of September. CLLS investors should pay attention to an increase in activity from the world’s largest hedge funds last quarter, as there had been nine funds bullish on the stock at the end of June. At the end of this article we will also compare CLLS to other stocks including FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), MVC Capital, Inc. (NYSE:MVC), and Northern Dynasty Minerals Ltd. (USA) (NYSEAMEX:NAK) to get a better sense of its popularity.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
With all of this in mind, we’re going to take a look at the recent action surrounding Cellectis SA (ADR) (NASDAQ:CLLS).
Hedge fund activity in Cellectis SA (ADR) (NASDAQ:CLLS)
As stated earlier, at the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on Cellectis, a change of 11% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CLLS over the last five quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Bihua Chen’s Cormorant Asset Management has the number one position in Cellectis SA (ADR) (NASDAQ:CLLS), worth close to $12 million, corresponding to 1.3% of its total 13F portfolio. Sitting at the No. 2 spot is OrbiMed Advisors, led by Samuel Isaly, holding a $8.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish encompass Millennium Management, one of the 10 largest hedge funds in the world, Joseph Edelman’s Perceptive Advisors, and Charles Clough’s Clough Capital Partners. 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.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Springbok Capital, led by Gavin Saitowitz and Cisco J. del Valle, established the most valuable position in Cellectis SA (ADR) (NASDAQ:CLLS).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Cellectis SA (ADR) (NASDAQ:CLLS) but similarly valued. These stocks are FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), MVC Capital, Inc. (NYSE:MVC), Northern Dynasty Minerals Ltd. (USA) (NYSEAMEX:NAK), and Investors Title Company (NASDAQ:ITIC). This group of stocks’ market valuations match CLLS’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of six funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $38 million in CLLS’s case. Investors Title Company (NASDAQ:ITIC) is the least popular company from this table with only two funds having reported long positions. On the other hand, MVC Capital, Inc. (NYSE:MVC) is the most popular stock in this table, with 10 funds holding shares, the same number as in Cellectis SA (ADR) (NASDAQ:CLLS)’s case. This suggest that Cellectis might represent a good stock to add to your portfolio, although more research is still required.