At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
aTyr Pharma Inc (NASDAQ:LIFE) investors should pay attention to a decrease in enthusiasm from smart money lately. aTyr Pharma Inc (NASDAQ:LIFE) was in 7 hedge funds’ portfolios at the end of the third quarter of 2015. There were 8 hedge funds in our database with aTyr Pharma Inc (NASDAQ:LIFE) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Mobileiron Inc (NASDAQ:MOBL), UMH Properties, Inc (NYSE:UMH), and EnerNOC, Inc. (NASDAQ:ENOC) to gather more data points.
In the eyes of most traders, hedge funds are seen as unimportant, old financial vehicles of yesteryear. While there are more than 8000 funds in operation today, Our experts choose to focus on the leaders of this club, around 700 funds. Most estimates calculate that this group of people oversees most of the hedge fund industry’s total asset base, and by monitoring their best picks, Insider Monkey has brought to light a few investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, we’re going to take a look at the new action surrounding aTyr Pharma Inc (NASDAQ:LIFE).
How have hedgies been trading aTyr Pharma Inc (NASDAQ:LIFE)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 13% from the previous quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Julian Baker and Felix Baker’s Baker Bros. Advisors has the number one position in aTyr Pharma Inc (NASDAQ:LIFE), worth close to $24 million, corresponding to 0.2% of its total 13F portfolio. The second most bullish fund manager is EcoR1 Capital, managed by Oleg Nodelman, which holds a $8.6 million position; 3.9% of its 13F portfolio is allocated to the company. Remaining peers that are bullish comprise James E. Flynn’s Deerfield Management, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management, and Alec Litowitz and Ross Laser’s Magnetar Capital.
Due to the fact that aTyr Pharma Inc (NASDAQ:LIFE) has witnessed a declination in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedgies that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Mark Lampert’s Biotechnology Value Fund / BVF Inc said goodbye to the largest position of all the hedgies monitored by Insider Monkey, valued at close to $2.5 million in stock, and William Michaelcheck’s Mariner Investment Group was right behind this move, as the fund said goodbye to about $0.9 million worth of shares. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 fund heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as aTyr Pharma Inc (NASDAQ:LIFE) but similarly valued. These stocks are Mobileiron Inc (NASDAQ:MOBL), UMH Properties, Inc (NYSE:UMH), EnerNOC, Inc. (NASDAQ:ENOC), and CSS Industries, Inc. (NYSE:CSS). All of these stocks’ market caps are similar to aTyr Pharma Inc (NASDAQ:LIFE)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $47 million in aTyr Pharma Inc (NASDAQ:LIFE)’s case. EnerNOC, Inc. (NASDAQ:ENOC) is the most popular stock in this table. On the other hand, UMH Properties, Inc (NYSE:UMH) is the least popular one with only 4 bullish hedge fund positions. aTyr Pharma Inc (NASDAQ:LIFE) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, EnerNOC, Inc. (NASDAQ:ENOC) might be a better candidate to consider a long position.