With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Synthorx, Inc. (NASDAQ:THOR).
Synthorx, Inc. (NASDAQ:THOR) shareholders have witnessed an increase in hedge fund sentiment lately. THOR was in 7 hedge funds’ portfolios at the end of the second quarter of 2019. There were 5 hedge funds in our database with THOR holdings at the end of the previous quarter. Our calculations also showed that THOR isn’t among the 30 most popular stocks among hedge funds (see the video below).
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 market by 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the fresh hedge fund action regarding Synthorx, Inc. (NASDAQ:THOR).
What have hedge funds been doing with Synthorx, Inc. (NASDAQ:THOR)?
Heading into the third quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from the first quarter of 2019. By comparison, 0 hedge funds held shares or bullish call options in THOR a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Synthorx, Inc. (NASDAQ:THOR) was held by RA Capital Management, which reported holding $131.4 million worth of stock at the end of March. It was followed by OrbiMed Advisors with a $71.8 million position. Other investors bullish on the company included Camber Capital Management, Opaleye Management, and Berylson Capital Partners.
As industrywide interest jumped, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in Synthorx, Inc. (NASDAQ:THOR). Citadel Investment Group had $0.8 million invested in the company at the end of the quarter. Parvinder Thiara’s Athanor Capital also initiated a $0.3 million position during the quarter.
Let’s go over hedge fund activity in other stocks similar to Synthorx, Inc. (NASDAQ:THOR). These stocks are BioSpecifics Technologies Corp. (NASDAQ:BSTC), The Lovesac Company (NASDAQ:LOVE), Newtek Business Services, Corp. (NASDAQ:NEWT), and Loop Industries, Inc. (NASDAQ:LOOP). This group of stocks’ market values match THOR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BSTC | 11 | 55210 | -1 |
| LOVE | 10 | 45613 | 2 |
| NEWT | 5 | 6595 | -1 |
| LOOP | 1 | 229 | -1 |
| Average | 6.75 | 26912 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $233 million in THOR’s case. BioSpecifics Technologies Corp. (NASDAQ:BSTC) is the most popular stock in this table. On the other hand Loop Industries, Inc. (NASDAQ:LOOP) is the least popular one with only 1 bullish hedge fund positions. Synthorx, Inc. (NASDAQ:THOR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on THOR as the stock returned 20.4% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
