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 AnaptysBio, Inc. (NASDAQ:ANAB) and determine whether the smart money was really smart about this stock.
AnaptysBio, Inc. (NASDAQ:ANAB) investors should pay attention to an increase in enthusiasm from smart money in recent months. AnaptysBio, Inc. (NASDAQ:ANAB) was in 26 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 27. Our calculations also showed that ANAB 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. 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. With all of this in mind we’re going to view the fresh hedge fund action surrounding AnaptysBio, Inc. (NASDAQ:ANAB).
Hedge fund activity in AnaptysBio, Inc. (NASDAQ:ANAB)
At the end of the second quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in ANAB a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, EcoR1 Capital held the most valuable stake in AnaptysBio, Inc. (NASDAQ:ANAB), which was worth $68.7 million at the end of the third quarter. On the second spot was Tang Capital Management which amassed $56.5 million worth of shares. Frazier Healthcare Partners, Aquilo Capital Management, and Biotechnology Value Fund / BVF Inc 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 Aquilo Capital Management allocated the biggest weight to AnaptysBio, Inc. (NASDAQ:ANAB), around 7.17% of its 13F portfolio. Tang Capital Management is also relatively very bullish on the stock, setting aside 5.49 percent of its 13F equity portfolio to ANAB.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, initiated the most valuable position in AnaptysBio, Inc. (NASDAQ:ANAB). Point72 Asset Management had $4.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $2.1 million investment in the stock during the quarter. The following funds were also among the new ANAB investors: Michael Gelband’s ExodusPoint Capital, Donald Sussman’s Paloma Partners, and Parvinder Thiara’s Athanor Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as AnaptysBio, Inc. (NASDAQ:ANAB) but similarly valued. We will take a look at Evolent Health Inc (NYSE:EVH), Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), PBF Logistics LP (NYSE:PBFX), Meridian Bancorp, Inc. (NASDAQ:EBSB), ARMOUR Residential REIT, Inc. (NYSE:ARR), Apogee Enterprises, Inc. (NASDAQ:APOG), and Ichor Holdings Ltd. (NASDAQ:ICHR). This group of stocks’ market values match ANAB’s market value.
|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 12.3 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $370 million in ANAB’s case. Meridian Bancorp, Inc. (NASDAQ:EBSB) is the most popular stock in this table. On the other hand PBF Logistics LP (NYSE:PBFX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks AnaptysBio, Inc. (NASDAQ:ANAB) is more popular among hedge funds. Our overall hedge fund sentiment score for ANAB is 84.9. 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 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. Unfortunately ANAB wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ANAB were disappointed as the stock returned -34.6% since the end of the second 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.