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 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Atreca, Inc. (NASDAQ:BCEL).
Is BCEL a good stock to buy now? Hedge funds were buying. The number of bullish hedge fund positions rose by 3 in recent months. Atreca, Inc. (NASDAQ:BCEL) was in 12 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 9. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BCEL 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). There were 9 hedge funds in our database with BCEL holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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. Now let’s review the new hedge fund action surrounding Atreca, Inc. (NASDAQ:BCEL).
Do Hedge Funds Think BCEL Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the second quarter of 2020. By comparison, 6 hedge funds held shares or bullish call options in BCEL 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.
Among these funds, Baker Bros. Advisors held the most valuable stake in Atreca, Inc. (NASDAQ:BCEL), which was worth $49.4 million at the end of the third quarter. On the second spot was Redmile Group which amassed $35.6 million worth of shares. EcoR1 Capital, Samsara BioCapital, and Citadel Investment Group 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 EcoR1 Capital allocated the biggest weight to Atreca, Inc. (NASDAQ:BCEL), around 2.42% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, setting aside 2.41 percent of its 13F equity portfolio to BCEL.
As one would reasonably expect, key money managers have been driving this bullishness. Rock Springs Capital Management, managed by Kris Jenner, Gordon Bussard, Graham McPhail, assembled the most outsized position in Atreca, Inc. (NASDAQ:BCEL). Rock Springs Capital Management had $6.3 million invested in the company at the end of the quarter. Josh Donfeld and David Rogers’s Castle Hook Partners also made a $5.6 million investment in the stock during the quarter. The other funds with brand new BCEL positions are Kerr Neilson’s Platinum Asset Management and Greg Martinez’s Parkman Healthcare Partners.
Let’s now take a look at hedge fund activity in other stocks similar to Atreca, Inc. (NASDAQ:BCEL). These stocks are Community Trust Bancorp, Inc. (NASDAQ:CTBI), ScanSource, Inc. (NASDAQ:SCSC), Anika Therapeutics, Inc. (NASDAQ:ANIK), Lakeland Bancorp, Inc. (NASDAQ:LBAI), Origin Bancorp, Inc. (NASDAQ:OBNK), TCG BDC, Inc. (NASDAQ:CGBD), and Neoleukin Therapeutics, Inc. (NASDAQ:NLTX). This group of stocks’ market values are similar to BCEL’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $163 million in BCEL’s case. Neoleukin Therapeutics, Inc. (NASDAQ:NLTX) is the most popular stock in this table. On the other hand Origin Bancorp, Inc. (NASDAQ:OBNK) is the least popular one with only 6 bullish hedge fund positions. Atreca, Inc. (NASDAQ:BCEL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BCEL is 61.1. 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 BCEL as the stock returned 13.2% since the end of Q3 (through 12/8) 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.