With the third-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 fourth quarter. One of these stocks was Arbutus Biopharma Corp (NASDAQ:ABUS).
Is ABUS a good stock to buy now? The smart money was in an optimistic mood. The number of bullish hedge fund positions inched up by 1 in recent months. Arbutus Biopharma Corp (NASDAQ:ABUS) was in 9 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. Our calculations also showed that ABUS isn’t among the 30 most popular stocks among hedge funds (click for Q3 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In the eyes of most market participants, hedge funds are assumed to be worthless, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading at present, We hone in on the leaders of this club, around 850 funds. These hedge fund managers control bulk of the smart money’s total capital, and by tracking their inimitable investments, Insider Monkey has identified a few investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to take a peek at the key hedge fund action encompassing Arbutus Biopharma Corp (NASDAQ:ABUS).
Do Hedge Funds Think ABUS Is A Good Stock To Buy Now?
At third quarter’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ABUS over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Think Investments, managed by Shashin Shah, holds the largest position in Arbutus Biopharma Corp (NASDAQ:ABUS). Think Investments has a $6.3 million position in the stock, comprising 1.2% of its 13F portfolio. On Think Investments’s heels is Hudson Bay Capital Management, led by Sander Gerber, holding a $2.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Neil Shahrestani’s Ikarian Capital, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners. In terms of the portfolio weights assigned to each position Think Investments allocated the biggest weight to Arbutus Biopharma Corp (NASDAQ:ABUS), around 1.15% of its 13F portfolio. Hudson Bay Capital Management is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to ABUS.
As aggregate interest increased, key money managers were breaking ground themselves. Think Investments, managed by Shashin Shah, initiated the most valuable position in Arbutus Biopharma Corp (NASDAQ:ABUS). Think Investments had $6.3 million invested in the company at the end of the quarter. Neil Shahrestani’s Ikarian Capital also initiated a $0.4 million position during the quarter. The other funds with brand new ABUS positions are Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks similar to Arbutus Biopharma Corp (NASDAQ:ABUS). We will take a look at Liminal BioSciences Inc. (NASDAQ:LMNL), Stereotaxis Inc (NYSE:STXS), iRadimed Corporation (NASDAQ:IRMD), Capital Southwest Corporation (NASDAQ:CSWC), Taseko Mines Limited (NYSE:TGB), United Insurance Holdings Corp. (NASDAQ:UIHC), and West Bancorporation, Inc. (NASDAQ:WTBA). All of these stocks’ market caps are similar to ABUS’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 6.4 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $10 million in ABUS’s case. Stereotaxis Inc (NYSE:STXS) is the most popular stock in this table. On the other hand Liminal BioSciences Inc. (NASDAQ:LMNL) is the least popular one with only 1 bullish hedge fund positions. Arbutus Biopharma Corp (NASDAQ:ABUS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ABUS is 57.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on ABUS as the stock returned 21.1% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.