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Hedge Funds Are Buying Aimmune Therapeutics Inc (AIMT)

In this article you are going to find out whether hedge funds think Aimmune Therapeutics Inc (NASDAQ:AIMT) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Aimmune Therapeutics Inc (NASDAQ:AIMT) investors should pay attention to an increase in hedge fund interest in recent months. Our calculations also showed that AIMT 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Wil Harkey Nantahala Capital

Will Harkey of Nantahala Capital Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. With all of this in mind we’re going to take a look at the latest hedge fund action regarding Aimmune Therapeutics Inc (NASDAQ:AIMT).

How are hedge funds trading Aimmune Therapeutics Inc (NASDAQ:AIMT)?

Heading into the second quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in AIMT a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Palo Alto Investors, managed by William Leland Edwards, holds the biggest position in Aimmune Therapeutics Inc (NASDAQ:AIMT). Palo Alto Investors has a $47.5 million position in the stock, comprising 4% of its 13F portfolio. The second largest stake is held by Point72 Asset Management, led by Steve Cohen, holding a $22.3 million position; 0.2% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism include Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management, Sander Gerber’s Hudson Bay Capital Management and Julian Baker and Felix Baker’s Baker Bros. Advisors. In terms of the portfolio weights assigned to each position Palo Alto Investors allocated the biggest weight to Aimmune Therapeutics Inc (NASDAQ:AIMT), around 3.98% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, designating 1.93 percent of its 13F equity portfolio to AIMT.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, initiated the largest position in Aimmune Therapeutics Inc (NASDAQ:AIMT). Point72 Asset Management had $22.3 million invested in the company at the end of the quarter. Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management also made a $14.5 million investment in the stock during the quarter. The other funds with brand new AIMT positions are Steven Boyd’s Armistice Capital, Israel Englander’s Millennium Management, and Srini Akkaraju and Michael Dybbs’s Samsara BioCapital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Aimmune Therapeutics Inc (NASDAQ:AIMT) but similarly valued. We will take a look at NuStar Energy L.P. (NYSE:NS), ATN International, Inc. (NASDAQ:ATNI), SecureWorks Corp. (NASDAQ:SCWX), and Winnebago Industries, Inc. (NYSE:WGO). All of these stocks’ market caps match AIMT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NS 4 8087 -3
ATNI 8 59085 -1
SCWX 11 11882 -3
WGO 19 131961 -4
Average 10.5 52754 -2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $138 million in AIMT’s case. Winnebago Industries, Inc. (NYSE:WGO) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 4 bullish hedge fund positions. Aimmune Therapeutics Inc (NASDAQ:AIMT) 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 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on AIMT, though not to the same extent, as the stock returned 26.2% during the first two months and twenty two days of the second quarter and outperformed the market as well.

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

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