Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Nautilus Biotechnology Inc (NASDAQ:NAUT) changed recently.
Nautilus Biotechnology Inc (NASDAQ:NAUT) shareholders have witnessed an increase in hedge fund interest recently. Nautilus Biotechnology Inc (NASDAQ:NAUT) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic is 33. There were 18 hedge funds in our database with NAUT holdings at the end of March. Our calculations also showed that NAUT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Joseph Edelman of Perceptive Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to review the key hedge fund action surrounding Nautilus Biotechnology Inc (NASDAQ:NAUT).
Do Hedge Funds Think NAUT Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the first quarter of 2020. By comparison, 33 hedge funds held shares or bullish call options in NAUT a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
The largest stake in Nautilus Biotechnology Inc (NASDAQ:NAUT) was held by Perceptive Advisors, which reported holding $90 million worth of stock at the end of June. It was followed by RA Capital Management with a $25 million position. Other investors bullish on the company included OrbiMed Advisors, Alyeska Investment Group, and Nantahala Capital Management. In terms of the portfolio weights assigned to each position Perceptive Advisors allocated the biggest weight to Nautilus Biotechnology Inc (NASDAQ:NAUT), around 1.17% of its 13F portfolio. Sphera Global Healthcare Fund is also relatively very bullish on the stock, dishing out 0.55 percent of its 13F equity portfolio to NAUT.
As aggregate interest increased, some big names were leading the bulls’ herd. Perceptive Advisors, managed by Joseph Edelman, initiated the most valuable position in Nautilus Biotechnology Inc (NASDAQ:NAUT). Perceptive Advisors had $90 million invested in the company at the end of the quarter. Peter Kolchinsky’s RA Capital Management also made a $25 million investment in the stock during the quarter. The following funds were also among the new NAUT investors: OrbiMed Advisors, Anand Parekh’s Alyeska Investment Group, and Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Nautilus Biotechnology Inc (NASDAQ:NAUT) but similarly valued. These stocks are Playa Hotels & Resorts N.V. (NASDAQ:PLYA), Gogo Inc (NASDAQ:GOGO), Southside Bancshares, Inc. (NASDAQ:SBSI), Hawaiian Holdings, Inc. (NASDAQ:HA), Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), and OrthoPediatrics Corp. (NASDAQ:KIDS). This group of stocks’ market values are similar to NAUT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLYA | 31 | 324663 | 5 |
| GOGO | 22 | 180033 | 4 |
| SBSI | 8 | 40028 | 1 |
| HA | 16 | 63664 | 0 |
| CCO | 27 | 253209 | -2 |
| TRHC | 4 | 15108 | -3 |
| KIDS | 10 | 25879 | 2 |
| Average | 16.9 | 128941 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.9 hedge funds with bullish positions and the average amount invested in these stocks was $129 million. That figure was $185 million in NAUT’s case. Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is the most popular stock in this table. On the other hand Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) is the least popular one with only 4 bullish hedge fund positions. Nautilus Biotechnology Inc (NASDAQ:NAUT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NAUT is 54.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately NAUT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NAUT were disappointed as the stock returned -49.1% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Nautilus Biotechnology Inc.
Follow Nautilus Biotechnology Inc.
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Disclosure: None. This article was originally published at Insider Monkey.
