After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Rubius Therapeutics, Inc. (NASDAQ:RUBY).
Is RUBY a good stock to buy now? Prominent investors were getting more optimistic. The number of long hedge fund bets inched up by 3 recently. Rubius Therapeutics, Inc. (NASDAQ:RUBY) was in 10 hedge funds’ portfolios at the end of September. The all time high for this statistics is 7. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RUBY 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 7 hedge funds in our database with RUBY positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 we’re going to analyze the recent hedge fund action regarding Rubius Therapeutics, Inc. (NASDAQ:RUBY).
Do Hedge Funds Think RUBY Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in RUBY a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Rubius Therapeutics, Inc. (NASDAQ:RUBY) was held by Renaissance Technologies, which reported holding $1.3 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $0.4 million position. Other investors bullish on the company included Millennium Management, Arrowstreet Capital, and PDT Partners. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to Rubius Therapeutics, Inc. (NASDAQ:RUBY), around 0.02% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to RUBY.
As aggregate interest increased, key money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, created the most valuable position in Rubius Therapeutics, Inc. (NASDAQ:RUBY). Millennium Management had $0.4 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new RUBY position is Greg Eisner’s Engineers Gate Manager.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Rubius Therapeutics, Inc. (NASDAQ:RUBY) but similarly valued. We will take a look at Syros Pharmaceuticals, Inc. (NASDAQ:SYRS), Brightcove Inc (NASDAQ:BCOV), The Lovesac Company (NASDAQ:LOVE), AnaptysBio, Inc. (NASDAQ:ANAB), Allied Motion Technologies, Inc. (NASDAQ:AMOT), Yunji Inc. (NASDAQ:YJ), and TFF Pharmaceuticals, Inc. (NASDAQ:TFFP). All of these stocks’ market caps match RUBY’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 12.3 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $3 million in RUBY’s case. AnaptysBio, Inc. (NASDAQ:ANAB) is the most popular stock in this table. On the other hand Yunji Inc. (NASDAQ:YJ) is the least popular one with only 4 bullish hedge fund positions. Rubius Therapeutics, Inc. (NASDAQ:RUBY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RUBY is 53. 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. A small number of hedge funds were also right about betting on RUBY as the stock returned 59.5% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.