With the fourth-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 first quarter. One of these stocks was Assembly Biosciences Inc (NASDAQ:ASMB).
Assembly Biosciences Inc (NASDAQ:ASMB) shareholders have witnessed a decrease in hedge fund sentiment lately. ASMB was in 18 hedge funds’ portfolios at the end of December. There were 20 hedge funds in our database with ASMB holdings at the end of the previous quarter. Our calculations also showed that ASMB isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? 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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to check out the key hedge fund action regarding Assembly Biosciences Inc (NASDAQ:ASMB).
How have hedgies been trading Assembly Biosciences Inc (NASDAQ:ASMB)?
At Q4’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in ASMB a year ago. 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 Insider Monkey’s hedge fund database, Oleg Nodelman’s EcoR1 Capital has the number one position in Assembly Biosciences Inc (NASDAQ:ASMB), worth close to $54.4 million, amounting to 5.4% of its total 13F portfolio. On EcoR1 Capital’s heels is venBio Select Advisor, led by Behzad Aghazadeh, holding a $22.6 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism contain Samuel Isaly’s OrbiMed Advisors, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Thomas Steyer’s Farallon Capital.
Since Assembly Biosciences Inc (NASDAQ:ASMB) has faced declining sentiment from the smart money, we can see that there exists a select few money managers who sold off their positions entirely heading into Q3. It’s worth mentioning that Ken Greenberg and David Kim’s Ghost Tree Capital cut the largest stake of the 700 funds watched by Insider Monkey, totaling close to $12.1 million in call options. Oleg Nodelman’s fund, EcoR1 Capital, also said goodbye to its call options, about $5.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q3.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Assembly Biosciences Inc (NASDAQ:ASMB) but similarly valued. We will take a look at Dynavax Technologies Corporation (NASDAQ:DVAX), W&T Offshore, Inc. (NYSE:WTI), Triumph Group Inc (NYSE:TGI), and Blue Hills Bancorp Inc (NASDAQ:BHBK). This group of stocks’ market caps match ASMB’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $148 million in ASMB’s case. W&T Offshore, Inc. (NYSE:WTI) is the most popular stock in this table. On the other hand Blue Hills Bancorp Inc (NASDAQ:BHBK) is the least popular one with only 7 bullish hedge fund positions. Assembly Biosciences Inc (NASDAQ:ASMB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately ASMB wasn’t nearly as popular as these 15 stock and hedge funds that were betting on ASMB were disappointed as the stock returned -31.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.