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With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was AC Immune SA (NASDAQ:ACIU).
Is ACIU a good stock to buy now? AC Immune SA (NASDAQ:ACIU) has seen an increase in enthusiasm from smart money lately. AC Immune SA (NASDAQ:ACIU) was in 11 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 11. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ACIU 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.
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. 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 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
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. Keeping this in mind let's go over the fresh hedge fund action encompassing AC Immune SA (NASDAQ:ACIU).
Do Hedge Funds Think ACIU Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in ACIU over the last 21 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Biotechnology Value Fund / BVF Inc was the largest shareholder of AC Immune SA (NASDAQ:ACIU), with a stake worth $47.9 million reported as of the end of September. Trailing Biotechnology Value Fund / BVF Inc was Prosight Capital, which amassed a stake valued at $4.5 million. Renaissance Technologies, Aquilo Capital Management, and Millennium Management 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 Biotechnology Value Fund / BVF Inc allocated the biggest weight to AC Immune SA (NASDAQ:ACIU), around 2.61% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, dishing out 2.14 percent of its 13F equity portfolio to ACIU.
Consequently, specific money managers have jumped into AC Immune SA (NASDAQ:ACIU) headfirst. Aquilo Capital Management, managed by Marc Schneidman, initiated the most outsized position in AC Immune SA (NASDAQ:ACIU). Aquilo Capital Management had $2.3 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.1 million investment in the stock during the quarter. The other funds with brand new ACIU positions are Michael Gelband's ExodusPoint Capital and David M. Knott's Dorset Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as AC Immune SA (NASDAQ:ACIU) but similarly valued. These stocks are MBIA Inc. (NYSE:MBI), Oceaneering International, Inc. (NYSE:OII), Miller Industries, Inc. (NYSE:MLR), Merus N.V. (NASDAQ:MRUS), Franks International NV (NYSE:FI), Prevail Therapeutics Inc. (NASDAQ:PRVL), and Intelligent Systems Corporation (NYSE:INS). All of these stocks' market caps are similar to ACIU's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MBI,16,65059,0 OII,18,30144,1 MLR,11,55092,1 MRUS,13,120093,-2 FI,9,5350,0 PRVL,12,205610,1 INS,8,47979,0 Average,12.4,75618,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.4 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $61 million in ACIU's case. Oceaneering International, Inc. (NYSE:OII) is the most popular stock in this table. On the other hand Intelligent Systems Corporation (NYSE:INS) is the least popular one with only 8 bullish hedge fund positions. AC Immune SA (NASDAQ:ACIU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACIU is 51. 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 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 surpassed the market again by 16.2 percentage points. Unfortunately ACIU wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ACIU investors were disappointed as the stock returned 3.9% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.