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Hedge Funds Souring On Acasti Pharma Inc. (ACST)

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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Acasti Pharma Inc. (NASDAQ:ACST)?

Acasti Pharma Inc. (NASDAQ:ACST) has experienced a decrease in enthusiasm from smart money recently. Our calculations also showed that ACST 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.

To the average investor there are plenty of methods shareholders have at their disposal to size up stocks. Two of the best methods are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can outpace the market by a very impressive amount (see the details here).

RENAISSANCE TECHNOLOGIES

Jim Simons Founder of Renaissance Technologies

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 the 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 recent hedge fund action regarding Acasti Pharma Inc. (NASDAQ:ACST).

What does smart money think about Acasti Pharma Inc. (NASDAQ:ACST)?

Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -57% from the previous quarter. By comparison, 3 hedge funds held shares or bullish call options in ACST 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 Acasti Pharma Inc. (NASDAQ:ACST) was held by Two Sigma Advisors, which reported holding $0.1 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $0 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

Judging by the fact that Acasti Pharma Inc. (NASDAQ:ACST) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of funds who were dropping their full holdings heading into Q4. It’s worth mentioning that Joseph Edelman’s Perceptive Advisors sold off the biggest investment of the 750 funds watched by Insider Monkey, comprising about $4.4 million in stock. William Harnisch’s fund, Peconic Partners LLC, also dumped its stock, about $0.9 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 4 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Acasti Pharma Inc. (NASDAQ:ACST) but similarly valued. We will take a look at Global Self Storage, Inc. (NASDAQ:SELF), Anixa Biosciences, Inc. (NASDAQ:ANIX), Virco Mfg. Corporation (NASDAQ:VIRC), and Armata Pharmaceuticals, Inc. (NYSE:ARMP). All of these stocks’ market caps resemble ACST’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SELF 1 68 0
ANIX 1 51 1
VIRC 2 2410 0
ARMP 1 207 0
Average 1.25 684 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 1.25 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $0 million in ACST’s case. Virco Mfg. Corporation (NASDAQ:VIRC) is the most popular stock in this table. On the other hand Global Self Storage, Inc. (NASDAQ:SELF) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Acasti Pharma Inc. (NASDAQ:ACST) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on ACST as the stock returned 66.3% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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