Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Bicycle Therapeutics plc (NASDAQ:BCYC).
Bicycle Therapeutics plc (NASDAQ:BCYC) has seen an increase in support from the world’s most elite money managers lately. BCYC was in 6 hedge funds’ portfolios at the end of March. There were 5 hedge funds in our database with BCYC positions at the end of the previous quarter. Our calculations also showed that BCYC 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 stocks recommended/scorned by legendary Bill Miller. 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. Keeping this in mind we’re going to take a glance at the key hedge fund action regarding Bicycle Therapeutics plc (NASDAQ:BCYC).
How are hedge funds trading Bicycle Therapeutics plc (NASDAQ:BCYC)?
Heading into the second quarter of 2020, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in BCYC a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Eashwar Krishnan’s Tybourne Capital Management has the most valuable position in Bicycle Therapeutics plc (NASDAQ:BCYC), worth close to $26.7 million, amounting to 1% of its total 13F portfolio. On Tybourne Capital Management’s heels is Point72 Asset Management, led by Steve Cohen, holding a $5.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism contain Benjamin A. Smith’s Laurion Capital Management, Renaissance Technologies and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Tybourne Capital Management allocated the biggest weight to Bicycle Therapeutics plc (NASDAQ:BCYC), around 0.98% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, setting aside 0.04 percent of its 13F equity portfolio to BCYC.
Consequently, specific money managers have been driving this bullishness. Renaissance Technologies, assembled the largest position in Bicycle Therapeutics plc (NASDAQ:BCYC). Renaissance Technologies had $0.3 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to Bicycle Therapeutics plc (NASDAQ:BCYC). We will take a look at Willdan Group, Inc. (NASDAQ:WLDN), Landcadia Holdings, Inc. (NASDAQ:LCAHU), Sohu.com Inc (NASDAQ:SOHU), and Albireo Pharma, Inc. (NASDAQ:ALBO). All of these stocks’ market caps are closest to BCYC’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $34 million in BCYC’s case. Landcadia Holdings, Inc. (NASDAQ:LCAHU) is the most popular stock in this table. On the other hand Willdan Group, Inc. (NASDAQ:WLDN) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Bicycle Therapeutics plc (NASDAQ:BCYC) is even less popular than WLDN. 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 managed to beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on BCYC, though not to the same extent, as the stock returned 25.3% during the second quarter (through June 10th) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.