Hedge Funds Have Never Been Less Bullish On Seres Therapeutics Inc (MCRB)

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Seres Therapeutics Inc (NASDAQ:MCRB) based on that data.

Seres Therapeutics Inc (NASDAQ:MCRB) was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. MCRB has seen a decrease in hedge fund interest of late. There were 5 hedge funds in our database with MCRB positions at the end of the previous quarter. Our calculations also showed that MCRB isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

In the 21st century investor’s toolkit there are several tools stock market investors employ to analyze stocks. A duo of the most useful tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top money managers can outperform their index-focused peers by a significant margin (see the details here).

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At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to view the key hedge fund action surrounding Seres Therapeutics Inc (NASDAQ:MCRB).

Hedge fund activity in Seres Therapeutics Inc (NASDAQ:MCRB)

At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards MCRB over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the biggest position in Seres Therapeutics Inc (NASDAQ:MCRB), worth close to $3.8 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is D E Shaw, led by D. E. Shaw, holding a $1.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism contain John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Seres Therapeutics Inc (NASDAQ:MCRB), around 0.0037% of its 13F portfolio. D E Shaw is also relatively very bullish on the stock, setting aside 0.0027 percent of its 13F equity portfolio to MCRB.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: AQR Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified MCRB as a viable investment and initiated a position in the stock.

Let’s check out hedge fund activity in other stocks similar to Seres Therapeutics Inc (NASDAQ:MCRB). We will take a look at Ellington Financial Inc. (NYSE:EFC), ProPetro Holding Corp. (NYSE:PUMP), Matrix Service Co (NASDAQ:MTRX), and Leju Holdings Ltd (NYSE:LEJU). This group of stocks’ market caps are similar to MCRB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EFC 11 20301 -1
PUMP 13 31997 -10
MTRX 15 14923 -3
LEJU 1 2398 0
Average 10 17405 -3.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $6 million in MCRB’s case. Matrix Service Co (NASDAQ:MTRX) is the most popular stock in this table. On the other hand Leju Holdings Ltd (NYSE:LEJU) is the least popular one with only 1 bullish hedge fund positions. Seres Therapeutics Inc (NASDAQ:MCRB) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on MCRB as the stock returned 53.8% during the second quarter and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.