Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Avalanche Biotechnologies Inc (NASDAQ:AAVL) to find out whether it was one of their high conviction long-term ideas.
Avalanche Biotechnologies Inc (NASDAQ:AAVL) was in 19 hedge funds’ portfolios at the end of September. AAVL has experienced a decrease in activity from the world’s largest hedge funds lately. There were 22 hedge funds in our database with AAVL holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Sparton Corporation (NYSE:SPA), Johnson Outdoors Inc. (NASDAQ:JOUT), and Western Asset Managed High Incm Fnd Inc. (NYSE:MHY) to gather more data points.
In today’s marketplace there are numerous formulas stock traders can use to appraise their holdings. A couple of the most innovative formulas are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the market by a very impressive margin (see the details here).
With all of this in mind, we’re going to take a glance at the key action encompassing Avalanche Biotechnologies Inc (NASDAQ:AAVL).
What does the smart money think about Avalanche Biotechnologies Inc (NASDAQ:AAVL)?
Heading into Q4, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Cadian Capital, managed by Eric Bannasch, holds the number one position in Avalanche Biotechnologies Inc (NASDAQ:AAVL). Cadian Capital has a $12.2 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by VHCP Management, led by Anders Hove and Bong Koh, holding a $11.4 million position; 2.9% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism consist of Jeremy Green’s Redmile Group, Hal Mintz’s Sabby Capital and Dmitry Balyasny’s Balyasny Asset Management.