The shares of Signal Genetics Inc (NASDAQ:SGNL), Asterias Biotherapeutics Inc (NYSEMKT:AST) and TreeHouse Foods Inc. (NYSE:THS) all moved significantly upwards today. Signal Genetics jumped as high as $2.94 per share, a resounding gain of just 100% from yesterday’s close, with shares now trading up by nearly 59% on the day. The major spike in share price and trading volume occurred after after the company announced that it has signed a master service agreement with a leading, unnamed pharmaceutical company, which will run the Signal Genetic’s MyPRS genetic test across multiple clinical trials aiming to find treatments for patients suffering from multiple myeloma, a type of cancer of the bone marrow cells. Meanwhile, Asterias Biotherapeutics, spiked as high as $5.25 per share, a huge jump from its $3.72 per share close yesterday, and is currently trading up by over 25% on the day after the company announced that it has been added to the Russell 2000, Russell 3000, Russell Global, and Russell Microcap indexes. On the other hand, TreeHouse Foods Inc. (NYSE:THS) surged as high as $82.26 per share, a substantial leap from its $74.14 per share close yesterday, and is currently up by 7.64% today after KeyBanc Capital Markets analyst Akshay Jagdale mentioned the company in a note as a possible buyer of ConAgra Foods Inc (NYSE:CAG)’s private label business, which it was announced yesterday the company would be exiting from.
As much as these companies’ share prices have moved today, they differ in terms of hedge fund interest and insider sentiment. Asterias Biotherapeutics Inc (NYSEMKT:AST) has experienced an increase in enthusiasm from smart money of late, while TreeHouse Foods Inc. (NYSE:THS) has witnessed a decrease in hedge fund activity lately. There were no hedge funds among those tracked by Insider Monkey by the end of the first quarter which had a long position on Signal Genetics Inc (NASDAQ:SGNL), which was just a $7 million market cap company entering trading today.
Why does Insider Monkey track hedge fund activity in companies like Signal Genetics, Asterias Biotherapeutics and TreeHouse Foods? General opinion is that hedge funds under perform the S&P 500 based on net returns. But we are missing something very important here. Hedge funds generally pull in strong returns from their top small-cap stocks and invest a lot of their resources into analyzing these stocks. They simply don’t take large enough positions in them relative to their portfolios to generate strong overall returns because their large-cap picks underperform the market. We share the top 15 small-cap stocks favored by the best hedge fund managers every quarter and this strategy has managed to outperform the S&P 500 every year since it was launched in August 2012, returning over 145% and beating the market by more than 85 percentage points (read the details). Because of this, we know that collective hedge fund sentiment is extremely telling and valuable.
Insider Monkey also follows insider sentiment on stocks like Signal Genetics Inc (NASDAQ:SGNL), Asterias Biotherapeutics Inc (NYSEMKT:AST) and TreeHouse Foods Inc. (NYSE:THS). While there were no recorded sales or purchases of stock by insiders in Signal Genetics, there were recent purchases of stock by insiders of Asterias Biotherapeutics, while alternatively, there were recent sales of stock by insiders of TreeHouse Foods. In the case of Asterias Biotherapeutics, Directors Richard Lebuhn, Alfred Kingsley, Andrew Arno, and Natale Ricciardi bought 5,000 shares each on June 25. As for TreeHouse Foods, CFO Dennis Riordan sold a total of 10,000 shares of the company on June 15.
Considering all of this information, let’s take a closer look at how hedge funds have been trading Asterias Biotherapeutics and TreeHouse Foods lately.
Hedge fund activity in Asterias Biotherapeutics Inc (NYSEMKT:AST) and TreeHouse Foods Inc. (NYSE:THS)
At the end of the first quarter, a total of four of the hedge funds tracked by Insider Monkey were long in Asterias Biotherapeutics, a change of 100% from one quarter earlier. The total value of the holdings increased by a whopping 885.71% to $5.24 million at the end of the first quarter from just $532,000 in the previous quarter. This is still a significant increase even if the company’s shares jumped 108.3% in the first quarter of 2015. As industrywide interest jumped, specific money managers were breaking ground. Broadwood Capital, managed by Neal C. Bradsher, created the biggest position in Asterias Biotherapeutics Inc (NYSEMKT:AST). Broadwood Capital had $4.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $374,000 investment in the stock during the quarter. The only other fund with a brand new Asterias position was Michael Platt and William Reeves’ BlueCrest Capital Management.
Also at the end of the first quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long in TreeHouse Foods, down 7% from the end of the fourth quarter of 2014. In terms of the total value of their holdings, hedge funds held $162.73 million at the end of the first quarter, down 2% from $166.05 million in the prior quarter. The stock went down in value by 0.6% in the first quarter. When looking at the hedgies followed by Insider Monkey, Ken Fisher’s Fisher Asset Management had the largest position in TreeHouse Foods Inc. (NYSE:THS), worth close to $61.4 million, corresponding to 0.1% of its total 13F portfolio. On Fisher Asset Management’s heels was Clint Carlson of Carlson Capital, with a $24.2 million position. Other members of the smart money that were bullish comprise of Anand Parekh’s Alyeska Investment Group, David E. Shaw’s D.E. Shaw & Co., L.P., and Lee Munder’s Lee Munder Capital Group. Because TreeHouse Foods Inc. (NYSE:THS) experienced bearish sentiment from the entirety of the hedge funds we track, there were a few money managers that elected to cut their full holdings in the first quarter. Interestingly, Daniel Gold‘s QVT Financial sold off the biggest investment of the “upper crust” of funds followed by Insider Monkey, comprising 132,450 shares, worth an estimated $11.3 million. Richard Driehaus’ fund, Driehaus Capital, also cut its stake of 56,850 shares, worth about $4.9 million.
Disclosure: None
