At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards aTyr Pharma Inc. (NASDAQ:LIFE).
Is aTyr Pharma (LIFE) a good stock to buy now? LIFE shareholders have witnessed an increase in enthusiasm from smart money of late. aTyr Pharma Inc. (NASDAQ:LIFE) was in 6 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 9. There were 5 hedge funds in our database with LIFE positions at the end of the second quarter. Our calculations also showed that LIFE 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 financial world there are a large number of formulas stock traders use to evaluate their stock investments. A couple of the most under-the-radar formulas are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a healthy amount (see the details here).
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. Keeping this in mind let’s take a gander at the recent hedge fund action encompassing aTyr Pharma Inc. (NASDAQ:LIFE).
Hedge fund activity in aTyr Pharma Inc. (NASDAQ:LIFE)
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LIFE over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Alyeska Investment Group was the largest shareholder of aTyr Pharma Inc. (NASDAQ:LIFE), with a stake worth $2.4 million reported as of the end of September. Trailing Alyeska Investment Group was Viking Global, which amassed a stake valued at $1.9 million. Renaissance Technologies, Two Sigma Advisors, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Alyeska Investment Group allocated the biggest weight to aTyr Pharma Inc. (NASDAQ:LIFE), around 0.04% of its 13F portfolio. Ardsley Partners is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to LIFE.
As one would reasonably expect, key money managers have jumped into aTyr Pharma Inc. (NASDAQ:LIFE) headfirst. Millennium Management, managed by Israel Englander, assembled the most valuable position in aTyr Pharma Inc. (NASDAQ:LIFE). Millennium Management had $0.1 million invested in the company at the end of the quarter. Philip Hempleman’s Ardsley Partners also made a $0.1 million investment in the stock during the quarter.
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 Amplify Energy Corp. (NYSE:AMPY), Monaker Group, Inc. (NASDAQ:MKGI), Superior Industries International Inc. (NYSE:SUP), Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT), Unico American Corporation (NASDAQ:UNAM), CPI Aerostructures, Inc. (NYSE:CVU), and BP Prudhoe Bay Royalty Trust (NYSE:BPT). This group of stocks’ market valuations are similar to LIFE’s market valuation.
|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 4.7 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $6 million in LIFE’s case. Amplify Energy Corp. (NYSE:AMPY) is the most popular stock in this table. On the other hand Unico American Corporation (NASDAQ:UNAM) is the least popular one with only 1 bullish hedge fund positions. aTyr Pharma Inc. (NASDAQ:LIFE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LIFE is 48.7. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on LIFE as the stock returned 9.9% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.