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 Sierra Oncology, Inc. (NASDAQ:SRRA).
Is SRRA a good stock to buy now? The best stock pickers were getting more bullish. The number of long hedge fund positions rose by 2 lately. Sierra Oncology, Inc. (NASDAQ:SRRA) was in 11 hedge funds’ portfolios at the end of September. The all time high for this statistics is 18. Our calculations also showed that SRRA 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.
If you’d ask most market participants, hedge funds are seen as slow, old investment tools of yesteryear. While there are more than 8000 funds trading at present, Our experts hone in on the masters of this group, approximately 850 funds. These hedge fund managers have their hands on the majority of the smart money’s total capital, and by observing their inimitable equity investments, Insider Monkey has revealed a few investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 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 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 we’re going to analyze the latest hedge fund action surrounding Sierra Oncology, Inc. (NASDAQ:SRRA).
Do Hedge Funds Think SRRA Is A Good Stock To Buy Now?
At third quarter’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in SRRA a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Vivo Capital was the largest shareholder of Sierra Oncology, Inc. (NASDAQ:SRRA), with a stake worth $20.5 million reported as of the end of September. Trailing Vivo Capital was OrbiMed Advisors, which amassed a stake valued at $15.8 million. Mangrove Partners, Ikarian Capital, and Frazier Healthcare Partners 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 Vivo Capital allocated the biggest weight to Sierra Oncology, Inc. (NASDAQ:SRRA), around 1.18% of its 13F portfolio. Mangrove Partners is also relatively very bullish on the stock, dishing out 0.56 percent of its 13F equity portfolio to SRRA.
As one would reasonably expect, key hedge funds were breaking ground themselves. Millennium Management, managed by Israel Englander, created the most valuable position in Sierra Oncology, Inc. (NASDAQ:SRRA). Millennium Management had $1.3 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.1 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sierra Oncology, Inc. (NASDAQ:SRRA) but similarly valued. These stocks are La Jolla Pharmaceutical Company (NASDAQ:LJPC), Willis Lease Finance Corporation (NASDAQ:WLFC), Ambow Education Holding Ltd. (NYSE:AMBO), Aclaris Therapeutics, Inc. (NASDAQ:ACRS), Tonix Pharmaceuticals Holding Corp. (NASDAQ:TNXP), Pro-Dex, Inc. (NASDAQ:PDEX), and X4 Pharmaceuticals, Inc. (NASDAQ:XFOR). This group of stocks’ market values match SRRA’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 5.6 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $51 million in SRRA’s case. Aclaris Therapeutics, Inc. (NASDAQ:ACRS) is the most popular stock in this table. On the other hand Ambow Education Holding Ltd. (NYSE:AMBO) is the least popular one with only 1 bullish hedge fund positions. Sierra Oncology, Inc. (NASDAQ:SRRA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SRRA is 58.7. 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 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 SRRA as the stock returned 41.7% 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.