The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Akero Therapeutics, Inc. (NASDAQ:AKRO).
Akero Therapeutics, Inc. (NASDAQ:AKRO) investors should pay attention to an increase in activity from the world's largest hedge funds lately. Our calculations also showed that AKRO isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_690797" align="aligncenter" width="392"] Sahm Adrangi of Kerrisdale Capital[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's take a glance at the fresh hedge fund action surrounding Akero Therapeutics, Inc. (NASDAQ:AKRO).
What have hedge funds been doing with Akero Therapeutics, Inc. (NASDAQ:AKRO)?
Heading into the second quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 56% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in AKRO a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Akero Therapeutics, Inc. (NASDAQ:AKRO) was held by Alkeon Capital Management, which reported holding $19.6 million worth of stock at the end of September. It was followed by Hillhouse Capital Management with a $18.9 million position. Other investors bullish on the company included Vivo Capital, Point72 Asset Management, and Cormorant Asset Management. In terms of the portfolio weights assigned to each position Vivo Capital allocated the biggest weight to Akero Therapeutics, Inc. (NASDAQ:AKRO), around 1.55% of its 13F portfolio. Stepstone Group is also relatively very bullish on the stock, dishing out 1.15 percent of its 13F equity portfolio to AKRO.
With a general bullishness amongst the heavyweights, some big names have jumped into Akero Therapeutics, Inc. (NASDAQ:AKRO) headfirst. Vivo Capital, managed by Albert Cha and Frank Kung, initiated the most valuable position in Akero Therapeutics, Inc. (NASDAQ:AKRO). Vivo Capital had $17.1 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $1.4 million investment in the stock during the quarter. The other funds with brand new AKRO positions are Bhagwan Jay Rao's Integral Health Asset Management, Srini Akkaraju and Michael Dybbs's Samsara BioCapital, and Sahm Adrangi's Kerrisdale Capital.
Let's now take a look at hedge fund activity in other stocks similar to Akero Therapeutics, Inc. (NASDAQ:AKRO). We will take a look at Axcelis Technologies Inc (NASDAQ:ACLS), The RealReal, Inc. (NASDAQ:REAL), Radius Health Inc (NASDAQ:RDUS), and Revolve Group, Inc. (NYSE:RVLV). This group of stocks' market valuations are closest to AKRO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACLS,13,81385,1 REAL,15,79260,2 RDUS,23,111468,1 RVLV,10,11180,-1 Average,15.25,70823,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $112 million in AKRO's case. Radius Health Inc (NASDAQ:RDUS) is the most popular stock in this table. On the other hand Revolve Group, Inc. (NYSE:RVLV) is the least popular one with only 10 bullish hedge fund positions. Akero Therapeutics, Inc. (NASDAQ:AKRO) is not the least popular stock in this group but hedge fund interest is still below average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and surpassed the market by 16.8 percentage points. Unfortunately AKRO wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); AKRO investors were disappointed as the stock returned 19% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.