Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Coherus Biosciences Inc (NASDAQ:CHRS) to find out whether there were any major changes in hedge funds’ views.
Coherus Biosciences Inc (NASDAQ:CHRS) investors should pay attention to an increase in hedge fund interest recently. Coherus Biosciences Inc (NASDAQ:CHRS) was in 23 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 35. There were 20 hedge funds in our database with CHRS positions at the end of the fourth quarter. Our calculations also showed that CHRS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Kerr Neilson of Platinum Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we’re going to review the fresh hedge fund action encompassing Coherus Biosciences Inc (NASDAQ:CHRS).
Do Hedge Funds Think CHRS Is A Good Stock To Buy Now?
At the end of March, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CHRS over the last 23 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Joseph Edelman’s Perceptive Advisors has the biggest position in Coherus Biosciences Inc (NASDAQ:CHRS), worth close to $68.6 million, corresponding to 0.9% of its total 13F portfolio. The second largest stake is held by Sio Capital, managed by Michael Castor, which holds a $12.4 million position; 2.5% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Anders Hallberg and Carl Bennet’s HealthInvest Partners AB, Kevin C. Tang’s Tang Capital Management and Kerr Neilson’s Platinum Asset Management. In terms of the portfolio weights assigned to each position HealthInvest Partners AB allocated the biggest weight to Coherus Biosciences Inc (NASDAQ:CHRS), around 7.68% of its 13F portfolio. Tang Capital Management is also relatively very bullish on the stock, designating 2.67 percent of its 13F equity portfolio to CHRS.
As one would reasonably expect, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the largest position in Coherus Biosciences Inc (NASDAQ:CHRS). Millennium Management had $5.9 million invested in the company at the end of the quarter. Devesh Gandhi’s SilverArc Capital also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Sander Gerber’s Hudson Bay Capital Management, Michael Gelband’s ExodusPoint Capital, and Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks similar to Coherus Biosciences Inc (NASDAQ:CHRS). We will take a look at Westport Fuel Systems Inc. (NASDAQ:WPRT), Apogee Enterprises, Inc. (NASDAQ:APOG), Tactile Systems Technology, Inc. (NASDAQ:TCMD), Summit Hotel Properties Inc (NYSE:INN), Annexon, Inc. (NASDAQ:ANNX), BioXcel Therapeutics, Inc. (NASDAQ:BTAI), and Maxeon Solar Technologies, Ltd. (NASDAQ:MAXN). This group of stocks’ market valuations match CHRS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WPRT | 15 | 56843 | 2 |
| APOG | 9 | 23117 | 1 |
| TCMD | 9 | 13931 | -4 |
| INN | 13 | 31309 | 1 |
| ANNX | 10 | 264052 | -1 |
| BTAI | 6 | 25008 | -5 |
| MAXN | 6 | 12200 | -1 |
| Average | 9.7 | 60923 | -1 |
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 $61 million. That figure was $144 million in CHRS’s case. Westport Fuel Systems Inc. (NASDAQ:WPRT) is the most popular stock in this table. On the other hand BioXcel Therapeutics, Inc. (NASDAQ:BTAI) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Coherus Biosciences Inc (NASDAQ:CHRS) is more popular among hedge funds. Our overall hedge fund sentiment score for CHRS is 77.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately CHRS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CHRS were disappointed as the stock returned -11% since the end of the first quarter (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
