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 752 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 September 30th. In this article we look at what those investors think of Selecta Biosciences, Inc. (NASDAQ:SELB).
Selecta Biosciences, Inc. (NASDAQ:SELB) has seen an increase in enthusiasm from smart money lately. Our calculations also showed that SELB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to 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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to check out the recent hedge fund action encompassing Selecta Biosciences, Inc. (NASDAQ:SELB).
How are hedge funds trading Selecta Biosciences, Inc. (NASDAQ:SELB)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in SELB over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GLG Partners was the largest shareholder of Selecta Biosciences, Inc. (NASDAQ:SELB), with a stake worth $6.4 million reported as of the end of September. Trailing GLG Partners was OrbiMed Advisors, which amassed a stake valued at $5 million. Renaissance Technologies, Vivo Capital, and Millennium Management 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 Vivo Capital allocated the biggest weight to Selecta Biosciences, Inc. (NASDAQ:SELB), around 0.11% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, designating 0.1 percent of its 13F equity portfolio to SELB.
There weren’t any hedge funds initiating brand new positions in the stock during the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Selecta Biosciences, Inc. (NASDAQ:SELB) but similarly valued. We will take a look at Postal Realty Trust, Inc. (NYSE:PSTL), Iterum Therapeutics plc (NASDAQ:ITRM), Great Elm Capital Corp. (NASDAQ:GECC), and Sequans Communications SA ADR (NYSE:SQNS). This group of stocks’ market valuations are similar to SELB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PSTL | 7 | 20025 | -2 |
| ITRM | 3 | 11366 | 0 |
| GECC | 3 | 1592 | -1 |
| SQNS | 4 | 14981 | 0 |
| Average | 4.25 | 11991 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $14 million in SELB’s case. Postal Realty Trust, Inc. (NYSE:PSTL) is the most popular stock in this table. On the other hand Iterum Therapeutics plc (NASDAQ:ITRM) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Selecta Biosciences, Inc. (NASDAQ:SELB) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SELB wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SELB were disappointed as the stock returned -6.3% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
