The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at 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. Stocks kept going up since then. In this article we look at how hedge funds traded Atara Biotherapeutics Inc (NASDAQ:ATRA) and determine whether the smart money was really smart about this stock.
Atara Biotherapeutics Inc (NASDAQ:ATRA) was in 22 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. ATRA investors should be aware of an increase in enthusiasm from smart money recently. There were 17 hedge funds in our database with ATRA holdings at the end of March. Our calculations also showed that ATRA 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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 precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. 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 we’re going to take a peek at the recent hedge fund action surrounding Atara Biotherapeutics Inc (NASDAQ:ATRA).
What does smart money think about Atara Biotherapeutics Inc (NASDAQ:ATRA)?
Heading into the third quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the first quarter of 2020. On the other hand, there were a total of 12 hedge funds with a bullish position in ATRA a year ago. So, let’s see 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, Baupost Group, managed by Seth Klarman, holds the biggest position in Atara Biotherapeutics Inc (NASDAQ:ATRA). Baupost Group has a $144.6 million position in the stock, comprising 1.8% of its 13F portfolio. On Baupost Group’s heels is Redmile Group, managed by Jeremy Green, which holds a $99.7 million position; 1.8% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions comprise Lee Ainslie’s Maverick Capital, Mitchell Blutt’s Consonance Capital Management and Roberto Mignone’s Bridger Management. In terms of the portfolio weights assigned to each position Antipodean Advisors allocated the biggest weight to Atara Biotherapeutics Inc (NASDAQ:ATRA), around 5.38% of its 13F portfolio. Consonance Capital Management is also relatively very bullish on the stock, dishing out 4.57 percent of its 13F equity portfolio to ATRA.
Consequently, key money managers were leading the bulls’ herd. Consonance Capital Management, managed by Mitchell Blutt, assembled the most outsized position in Atara Biotherapeutics Inc (NASDAQ:ATRA). Consonance Capital Management had $76.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $11.2 million position during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Anand Parekh’s Alyeska Investment Group, and Ari Zweiman’s 683 Capital Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Atara Biotherapeutics Inc (NASDAQ:ATRA) but similarly valued. These stocks are Piper Sandler Companies (NYSE:PIPR), Primoris Services Corp (NASDAQ:PRIM), nLIGHT, Inc. (NASDAQ:LASR), Applied Molecular Transport Inc. (NASDAQ:AMTI), Arcos Dorados Holding Inc (NYSE:ARCO), Realogy Holdings Corp (NYSE:RLGY), and OrthoPediatrics Corp. (NASDAQ:KIDS). This group of stocks’ market valuations match ATRA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PIPR | 13 | 34068 | 1 |
| PRIM | 19 | 74332 | 8 |
| LASR | 12 | 58428 | 5 |
| AMTI | 8 | 70617 | 8 |
| ARCO | 15 | 53175 | 3 |
| RLGY | 24 | 259295 | -1 |
| KIDS | 13 | 55470 | 6 |
| Average | 14.9 | 86484 | 4.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $523 million in ATRA’s case. Realogy Holdings Corp (NYSE:RLGY) is the most popular stock in this table. On the other hand Applied Molecular Transport Inc. (NASDAQ:AMTI) is the least popular one with only 8 bullish hedge fund positions. Atara Biotherapeutics Inc (NASDAQ:ATRA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ATRA is 83.8. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market by 19.3 percentage points. Unfortunately ATRA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ATRA were disappointed as the stock returned -11.1% in Q3 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 many of these stocks already outperformed the market so far this year.
Follow Atara Biotherapeutics Inc. (NASDAQ:ATRA)
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Disclosure: None. This article was originally published at Insider Monkey.
