Hedge Funds Are Dipping Their Toes Into Aimmune Therapeutics Inc (AIMT)

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 Aimmune Therapeutics Inc (NASDAQ:AIMT) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

Aimmune Therapeutics Inc (NASDAQ:AIMT) investors should be aware of an increase in enthusiasm from smart money recently. Aimmune Therapeutics Inc (NASDAQ:AIMT) was in 20 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 22. There were 18 hedge funds in our database with AIMT positions at the end of the first quarter. Our calculations also showed that AIMT 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.

If you’d ask most market participants, hedge funds are perceived as underperforming, outdated financial tools of years past. While there are greater than 8000 funds trading at present, We choose to focus on the top tier of this group, about 850 funds. It is estimated that this group of investors shepherd the majority of the smart money’s total asset base, and by monitoring their best investments, Insider Monkey has uncovered many investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

William Leland Edwards of Palo Alto Investors

William Leland Edwards of Palo Alto Investors

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 recommended this real estate stock to our monthly premium newsletter subscribers after its stock price crashed. 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 gander at the recent hedge fund action regarding Aimmune Therapeutics Inc (NASDAQ:AIMT).

What does smart money think about Aimmune Therapeutics Inc (NASDAQ:AIMT)?

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the first quarter of 2020. By comparison, 13 hedge funds held shares or bullish call options in AIMT 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.

The largest stake in Aimmune Therapeutics Inc (NASDAQ:AIMT) was held by Palo Alto Investors, which reported holding $55.4 million worth of stock at the end of September. It was followed by Armistice Capital with a $15.4 million position. Other investors bullish on the company included Point72 Asset Management, Baker Bros. Advisors, and Hudson Bay Capital Management. In terms of the portfolio weights assigned to each position Burrage Capital Management allocated the biggest weight to Aimmune Therapeutics Inc (NASDAQ:AIMT), around 3.89% of its 13F portfolio. Palo Alto Investors is also relatively very bullish on the stock, designating 3.33 percent of its 13F equity portfolio to AIMT.

As one would reasonably expect, some big names have been driving this bullishness. Southpoint Capital Advisors, managed by John Smith Clark, assembled the biggest position in Aimmune Therapeutics Inc (NASDAQ:AIMT). Southpoint Capital Advisors had $5 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $0.6 million position during the quarter. The other funds with brand new AIMT positions are David Harding’s Winton Capital Management and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Let’s now review hedge fund activity in other stocks similar to Aimmune Therapeutics Inc (NASDAQ:AIMT). These stocks are Freedom Holding Corp. (NASDAQ:FRHC), The Providence Service Corporation (NASDAQ:PRSC), Maxar Technologies Inc (NYSE:MAXR), Independence Realty Trust Inc (NYSE:IRT), Talend S.A. (NASDAQ:TLND), Qiwi PLC (NASDAQ:QIWI), and Cerus Corporation (NASDAQ:CERS). This group of stocks’ market valuations match AIMT’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FRHC 3 15935 0
PRSC 12 259513 1
MAXR 15 112490 -1
IRT 8 80792 -8
TLND 28 522178 -1
QIWI 7 53958 -4
CERS 14 136689 -3
Average 12.4 168794 -2.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.4 hedge funds with bullish positions and the average amount invested in these stocks was $169 million. That figure was $151 million in AIMT’s case. Talend S.A. (NASDAQ:TLND) is the most popular stock in this table. On the other hand Freedom Holding Corp. (NASDAQ:FRHC) is the least popular one with only 3 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 overall hedge fund sentiment score for AIMT is 34.3. 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 third quarter and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on AIMT as the stock returned 106.2% during Q3 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.