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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of AbCellera Biologics Inc. (NASDAQ:ABCL).
Is ABCL a good stock to buy? Investors who are in the know were in a pessimistic mood. The number of bullish hedge fund bets dropped by 5 recently. AbCellera Biologics Inc. (NASDAQ:ABCL) was in 20 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 25. Our calculations also showed that ABCL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 25 hedge funds in our database with ABCL positions at the end of the fourth quarter.
Today there are several signals market participants put to use to evaluate stocks. Some of the best signals are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the market by a healthy margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ole Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks 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. With all of this in mind we're going to take a peek at the latest hedge fund action encompassing AbCellera Biologics Inc. (NASDAQ:ABCL).
Do Hedge Funds Think ABCL Is A Good Stock To Buy Now?
At the end of March, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ABCL over the last 23 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in AbCellera Biologics Inc. (NASDAQ:ABCL) was held by Viking Global, which reported holding $648.1 million worth of stock at the end of December. It was followed by Baker Bros. Advisors with a $354.9 million position. Other investors bullish on the company included OrbiMed Advisors, SB Management, and Harvard Management Co. In terms of the portfolio weights assigned to each position Harvard Management Co allocated the biggest weight to AbCellera Biologics Inc. (NASDAQ:ABCL), around 7.79% of its 13F portfolio. Falcon Edge Capital is also relatively very bullish on the stock, setting aside 5.13 percent of its 13F equity portfolio to ABCL.
Seeing as AbCellera Biologics Inc. (NASDAQ:ABCL) has faced declining sentiment from the entirety of the hedge funds we track, it's easy to see that there exists a select few hedgies who sold off their entire stakes last quarter. At the top of the heap, Lei Zhang's Hillhouse Capital Management cut the biggest position of the 750 funds monitored by Insider Monkey, comprising an estimated $24.1 million in stock, and Jeremy Green's Redmile Group was right behind this move, as the fund said goodbye to about $20.1 million worth. These moves are important to note, as total hedge fund interest dropped by 5 funds last quarter.
Let's go over hedge fund activity in other stocks similar to AbCellera Biologics Inc. (NASDAQ:ABCL). We will take a look at Jones Lang LaSalle Inc (NYSE:JLL), Flex Ltd. (NASDAQ:FLEX), Sensata Technologies Holding plc (NYSE:ST), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), ImmunityBio, Inc. (NASDAQ:IBRX), Axon Enterprise, Inc. (NASDAQ:AXON), and Sasol Limited (NYSE:SSL). This group of stocks' market caps are similar to ABCL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JLL,20,1241101,-3 FLEX,48,1635901,4 ST,36,1744897,1 NBIX,19,882657,-12 IBRX,6,8021,3 AXON,31,410366,-1 SSL,7,63240,-3 Average,23.9,855169,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $855 million. That figure was $1843 million in ABCL's case. Flex Ltd. (NASDAQ:FLEX) is the most popular stock in this table. On the other hand ImmunityBio, Inc. (NASDAQ:IBRX) is the least popular one with only 6 bullish hedge fund positions. AbCellera Biologics Inc. (NASDAQ:ABCL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ABCL is 40.7. 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. This is a slightly negative signal and 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately ABCL wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ABCL investors were disappointed as the stock returned -50.1% since the end of March (through 7/16) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.