Global Blood Therapeutics Inc (GBT): Hedge Funds In Wait-and-See Mode

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Global Blood Therapeutics Inc (NASDAQ:GBT) based on that data.

Hedge fund interest in Global Blood Therapeutics Inc (NASDAQ:GBT) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Hexcel Corporation (NYSE:HXL), Strategic Education Inc (NASDAQ:STRA), and Grocery Outlet Holding Corp. (NASDAQ:GO) to gather more data points. Our calculations also showed that GBT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

According to most shareholders, hedge funds are viewed as worthless, outdated financial tools of years past. While there are greater than 8000 funds in operation at the moment, Our experts choose to focus on the aristocrats of this club, around 850 funds. These hedge fund managers watch over most of the hedge fund industry’s total capital, and by observing their matchless stock picks, Insider Monkey has discovered several investment strategies that have historically outperformed the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Joseph Edelman of Perceptive Advisors

Joseph Edelman of Perceptive Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to go over the fresh hedge fund action surrounding Global Blood Therapeutics Inc (NASDAQ:GBT).

How have hedgies been trading Global Blood Therapeutics Inc (NASDAQ:GBT)?

At Q1’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards GBT over the last 18 quarters. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Joseph Edelman’s Perceptive Advisors has the most valuable position in Global Blood Therapeutics Inc (NASDAQ:GBT), worth close to $309.9 million, amounting to 8.1% of its total 13F portfolio. Coming in second is Driehaus Capital, led by Richard Driehaus, holding a $19.1 million position; 0.6% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish comprise D. E. Shaw’s D E Shaw, Eli Casdin’s Casdin Capital and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Perceptive Advisors allocated the biggest weight to Global Blood Therapeutics Inc (NASDAQ:GBT), around 8.07% of its 13F portfolio. Logos Capital is also relatively very bullish on the stock, dishing out 3.61 percent of its 13F equity portfolio to GBT.

Judging by the fact that Global Blood Therapeutics Inc (NASDAQ:GBT) has faced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds that slashed their positions entirely heading into Q4. It’s worth mentioning that Farallon Capital cut the largest investment of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $59.6 million in stock. Stephen DuBois’s fund, Camber Capital Management, also dumped its stock, about $58 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Global Blood Therapeutics Inc (NASDAQ:GBT). These stocks are Hexcel Corporation (NYSE:HXL), Strategic Education Inc (NASDAQ:STRA), Grocery Outlet Holding Corp. (NASDAQ:GO), and SiteOne Landscape Supply, Inc. (NYSE:SITE). This group of stocks’ market valuations are closest to GBT’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HXL 27 187145 -3
STRA 13 228871 0
GO 17 102998 3
SITE 19 86260 4
Average 19 151319 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $151 million. That figure was $431 million in GBT’s case. Hexcel Corporation (NYSE:HXL) is the most popular stock in this table. On the other hand Strategic Education Inc (NASDAQ:STRA) is the least popular one with only 13 bullish hedge fund positions. Global Blood Therapeutics Inc (NASDAQ:GBT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on GBT as the stock returned 30.3% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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