The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) has seen an increase in activity from the world’s largest hedge funds in recent months. Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) was in 19 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 13 hedge funds in our database with AGLE holdings at the end of March. Our calculations also showed that AGLE isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind let’s take a peek at the latest hedge fund action encompassing Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE).
How have hedgies been trading Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE)?
At the end of the second quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 46% from the first quarter of 2020. On the other hand, there were a total of 16 hedge funds with a bullish position in AGLE a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Baker Bros. Advisors held the most valuable stake in Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE), which was worth $40.5 million at the end of the third quarter. On the second spot was OrbiMed Advisors which amassed $37.1 million worth of shares. Nantahala Capital Management, Adage Capital Management, and Rock Springs Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Samsara BioCapital allocated the biggest weight to Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE), around 2.88% of its 13F portfolio. Soleus Capital is also relatively very bullish on the stock, designating 1.95 percent of its 13F equity portfolio to AGLE.
As aggregate interest increased, key hedge funds have jumped into Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) headfirst. Samsara BioCapital, managed by Srini Akkaraju and Michael Dybbs, created the biggest position in Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE). Samsara BioCapital had $8.9 million invested in the company at the end of the quarter. James E. Flynn’s Deerfield Management also initiated a $7.6 million position during the quarter. The other funds with new positions in the stock are Richard Driehaus’s Driehaus Capital, Didric Cederholm’s Lion Point, and Michael Castor’s Sio Capital.
Let’s also examine hedge fund activity in other stocks similar to Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE). We will take a look at Shoe Carnival, Inc. (NASDAQ:SCVL), The Marcus Corporation (NYSE:MCS), Personalis, Inc. (NASDAQ:PSNL), Cambridge Bancorp (NASDAQ:CATC), Puma Biotechnology Inc (NYSE:PBYI), PolyMet Mining Corp. (NYSE:PLM), and Caesarstone Ltd (NASDAQ:CSTE). This group of stocks’ market caps are similar to AGLE’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 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $199 million in AGLE’s case. Puma Biotechnology Inc (NYSE:PBYI) is the most popular stock in this table. On the other hand PolyMet Mining Corp. (NYSE:PLM) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) is more popular among hedge funds. Our overall hedge fund sentiment score for AGLE is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Unfortunately AGLE wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on AGLE were disappointed as the stock returned -23.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.