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. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Sangamo Therapeutics, Inc. (NASDAQ:SGMO) and determine whether the smart money was really smart about this stock.
Sangamo Therapeutics, Inc. (NASDAQ:SGMO) investors should be aware of an increase in enthusiasm from smart money in recent months. Sangamo Therapeutics, Inc. (NASDAQ:SGMO) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistics is 29. Our calculations also showed that SGMO isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
To most stock holders, hedge funds are perceived as worthless, outdated investment vehicles of yesteryear. While there are more than 8000 funds trading at present, Our experts choose to focus on the leaders of this club, around 850 funds. It is estimated that this group of investors oversee the majority of the smart money’s total asset base, and by following their matchless investments, Insider Monkey has formulated a few investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 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 precious metals prices. So, we are checking out this junior gold mining stock. We are also checking out this lithium company which could benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. With all of this in mind let’s take a look at the key hedge fund action regarding Sangamo Therapeutics, Inc. (NASDAQ:SGMO).
What have hedge funds been doing with Sangamo Therapeutics, Inc. (NASDAQ:SGMO)?
At the end of the second quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in SGMO a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Among these funds, Great Point Partners held the most valuable stake in Sangamo Therapeutics, Inc. (NASDAQ:SGMO), which was worth $14.2 million at the end of the third quarter. On the second spot was Tang Capital Management which amassed $14.1 million worth of shares. Casdin Capital, Two Sigma Advisors, and Baker Bros. Advisors 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 Tang Capital Management allocated the biggest weight to Sangamo Therapeutics, Inc. (NASDAQ:SGMO), around 1.38% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, designating 1.13 percent of its 13F equity portfolio to SGMO.
As aggregate interest increased, some big names have been driving this bullishness. PDT Partners, managed by Peter Muller, initiated the most valuable position in Sangamo Therapeutics, Inc. (NASDAQ:SGMO). PDT Partners had $1.5 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also made a $0.7 million investment in the stock during the quarter. The following funds were also among the new SGMO investors: Paul Tudor Jones’s Tudor Investment Corp, Mika Toikka’s AlphaCrest Capital Management, and Donald Sussman’s Paloma Partners.
Let’s also examine hedge fund activity in other stocks similar to Sangamo Therapeutics, Inc. (NASDAQ:SGMO). We will take a look at Constellation Pharmaceuticals, Inc. (NASDAQ:CNST), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), TTM Technologies, Inc. (NASDAQ:TTMI), Matson Inc. (NYSE:MATX), Office Properties Income Trust (NASDAQ:OPI), Broadmark Realty Capital Inc. (NYSE:BRMK), and Studio City International Holdings Limited (NYSE:MSC). This group of stocks’ market values match SGMO’s market value.
|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 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $88 million in SGMO’s case. Constellation Pharmaceuticals, Inc. (NASDAQ:CNST) is the most popular stock in this table. On the other hand Studio City International Holdings Limited (NYSE:MSC) is the least popular one with only 3 bullish hedge fund positions. Sangamo Therapeutics, Inc. (NASDAQ:SGMO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SGMO is 58.4. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately SGMO wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SGMO were disappointed as the stock returned 5.5% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.