Were Hedge Funds Right About ASLAN Pharmaceuticals Limited (ASLN)?

Is ASLAN Pharmaceuticals Limited (NASDAQ:ASLN) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

ASLAN Pharmaceuticals Limited (NASDAQ:ASLN) has experienced an increase in hedge fund interest recently. ASLAN Pharmaceuticals Limited (NASDAQ:ASLN) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 5 hedge funds in our database with ASLN positions at the end of the fourth quarter. Our calculations also showed that ASLN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Nathaniel August - Mangrove Partners

Nathaniel August of Mangrove Partners

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Do Hedge Funds Think ASLN Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 260% from one quarter earlier. By comparison, 4 hedge funds held shares or bullish call options in ASLN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

Is ASLN A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Vivo Capital, managed by Albert Cha and Frank Kung, holds the biggest position in ASLAN Pharmaceuticals Limited (NASDAQ:ASLN). Vivo Capital has a $9.5 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is OrbiMed Advisors, holding a $8.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions encompass Arsani William’s Logos Capital, Nathaniel August’s Mangrove Partners and Jonathan Barrett and Paul Segal’s Luminus Management. In terms of the portfolio weights assigned to each position Luminus Management allocated the biggest weight to ASLAN Pharmaceuticals Limited (NASDAQ:ASLN), around 1.13% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, earmarking 0.99 percent of its 13F equity portfolio to ASLN.

As aggregate interest increased, key money managers have been driving this bullishness. Vivo Capital, managed by Albert Cha and Frank Kung, created the most outsized position in ASLAN Pharmaceuticals Limited (NASDAQ:ASLN). Vivo Capital had $9.5 million invested in the company at the end of the quarter. OrbiMed Advisors also initiated a $8.4 million position during the quarter. The following funds were also among the new ASLN investors: Arsani William’s Logos Capital, Nathaniel August’s Mangrove Partners, and Jonathan Barrett and Paul Segal’s Luminus Management.

Let’s also examine hedge fund activity in other stocks similar to ASLAN Pharmaceuticals Limited (NASDAQ:ASLN). We will take a look at Heat Biologics, Inc. (NASDAQ:HTBX), Orion Group Holdings, Inc. (NYSE:ORN), San Juan Basin Royalty Trust (NYSE:SJT), Yumanity Therapeutics, Inc. (NASDAQ:YMTX), Xtant Medical Holdings, Inc. (NYSE:XTNT), Xinyuan Real Estate Co., Ltd. (NYSE:XIN), and Evans Bancorp Inc. (NYSE:EVBN). All of these stocks’ market caps are similar to ASLN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HTBX 1 333 0
ORN 12 17965 -1
SJT 2 471 0
YMTX 6 26173 0
XTNT 4 174401 0
XIN 4 836 0
EVBN 3 1082 -1
Average 4.6 31609 -0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.6 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $61 million in ASLN’s case. Orion Group Holdings, Inc. (NYSE:ORN) is the most popular stock in this table. On the other hand Heat Biologics, Inc. (NASDAQ:HTBX) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks ASLAN Pharmaceuticals Limited (NASDAQ:ASLN) is more popular among hedge funds. Our overall hedge fund sentiment score for ASLN is 90. 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 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 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Unfortunately ASLN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ASLN were disappointed as the stock returned -17% since the end of the first quarter (through 7/23) 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 most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.