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Is ACRS Stock A Buy or Sell?

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Is Aclaris Therapeutics, Inc. (NASDAQ:ACRS) 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.

Is ACRS stock a buy? Aclaris Therapeutics, Inc. (NASDAQ:ACRS) investors should pay attention to an increase in support from the world's most elite money managers lately. Aclaris Therapeutics, Inc. (NASDAQ:ACRS) was in 23 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 24. Our calculations also showed that ACRS isn't among the 30 most popular stocks among hedge funds (click for Q4 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 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.

Michael Gelband of ExodusPoint Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Now let's analyze the fresh hedge fund action surrounding Aclaris Therapeutics, Inc. (NASDAQ:ACRS).

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

At the end of the fourth quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 44% from the third quarter of 2020. On the other hand, there were a total of 17 hedge funds with a bullish position in ACRS a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in Aclaris Therapeutics, Inc. (NASDAQ:ACRS), which was worth $21.1 million at the end of the fourth quarter. On the second spot was Rock Springs Capital Management which amassed $17.3 million worth of shares. Adage Capital Management, Parkman Healthcare Partners, and Vivo Capital 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 Foresite Capital allocated the biggest weight to Aclaris Therapeutics, Inc. (NASDAQ:ACRS), around 12.18% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, earmarking 4.7 percent of its 13F equity portfolio to ACRS.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Commodore Capital, managed by Egen Atkinson and Michael Kramarz, established the biggest position in Aclaris Therapeutics, Inc. (NASDAQ:ACRS). Commodore Capital had $8.6 million invested in the company at the end of the quarter. Ken Greenberg and David Kim's Ghost Tree Capital also made a $4.2 million investment in the stock during the quarter. The following funds were also among the new ACRS investors: Ting Jia's Octagon Capital Advisors, Neil Shahrestani's Ikarian Capital, and Michael Gelband's ExodusPoint Capital.

Let's check out hedge fund activity in other stocks similar to Aclaris Therapeutics, Inc. (NASDAQ:ACRS). These stocks are Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), Northwest Pipe Company (NASDAQ:NWPX), MiX Telematics Limited (NYSE:MIXT), Ferroglobe PLC (NASDAQ:GSM), Unity Biotechnology, Inc. (NASDAQ:UBX), BlueLinx Holdings Inc. (NYSE:BXC), and SmartFinancial, Inc. (NASDAQ:SMBK). This group of stocks' market valuations are similar to ACRS's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SMBC,4,10141,0 NWPX,10,38255,0 MIXT,7,19399,0 GSM,14,36596,5 UBX,7,2043,2 BXC,17,87558,4 SMBK,6,22712,-1 Average,9.3,30958,1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.3 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $136 million in ACRS's case. BlueLinx Holdings Inc. (NYSE:BXC) is the most popular stock in this table. On the other hand Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Aclaris Therapeutics, Inc. (NASDAQ:ACRS) is more popular among hedge funds. Our overall hedge fund sentiment score for ACRS is 88.8. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on ACRS as the stock returned 302.2% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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

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