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In this article we will analyze whether Amyris Inc (NASDAQ:AMRS) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is AMRS a good stock to buy now? Amyris Inc (NASDAQ:AMRS) was in 11 hedge funds' portfolios at the end of September. The all time high for this statistics is 16. AMRS shareholders have witnessed a decrease in activity from the world's largest hedge funds in recent months. There were 16 hedge funds in our database with AMRS holdings at the end of June. Our calculations also showed that AMRS 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 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.
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. Now we're going to take a peek at the key hedge fund action encompassing Amyris Inc (NASDAQ:AMRS).
Do Hedge Funds Think AMRS Is A Good Stock To Buy Now?
At Q3's end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMRS over the last 21 quarters. With the smart money's capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Among these funds, Farallon Capital held the most valuable stake in Amyris Inc (NASDAQ:AMRS), which was worth $40.9 million at the end of the third quarter. On the second spot was Vivo Capital which amassed $38.4 million worth of shares. Casdin Capital, Perceptive Advisors, and Nantahala Capital 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 Vivo Capital allocated the biggest weight to Amyris Inc (NASDAQ:AMRS), around 2.22% of its 13F portfolio. Casdin Capital is also relatively very bullish on the stock, dishing out 0.97 percent of its 13F equity portfolio to AMRS.
Judging by the fact that Amyris Inc (NASDAQ:AMRS) has faced falling interest from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of money managers that elected to cut their entire stakes heading into Q4. Intriguingly, Justin John Ferayorni's Tamarack Capital Management dropped the biggest investment of the "upper crust" of funds watched by Insider Monkey, valued at an estimated $5.7 million in stock, and D. E. Shaw's D E Shaw was right behind this move, as the fund dropped about $2 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 5 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks similar to Amyris Inc (NASDAQ:AMRS). We will take a look at Meredith Corporation (NYSE:MDP), Cara Therapeutics Inc (NASDAQ:CARA), Passage Bio, Inc. (NASDAQ:PASG), 3D Systems Corporation (NYSE:DDD), Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), Diebold Nixdorf Incorporated (NYSE:DBD), and Hawaiian Holdings, Inc. (NASDAQ:HA). This group of stocks' market values resemble AMRS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MDP,18,162681,-2 CARA,19,75686,1 PASG,15,221636,2 DDD,15,33448,-3 SPPI,13,57477,3 DBD,15,125411,-1 HA,9,29092,-3 Average,14.9,100776,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $125 million in AMRS's case. Cara Therapeutics Inc (NASDAQ:CARA) is the most popular stock in this table. On the other hand Hawaiian Holdings, Inc. (NASDAQ:HA) is the least popular one with only 9 bullish hedge fund positions. Amyris Inc (NASDAQ:AMRS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMRS is 30.6. 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 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 still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on AMRS as the stock returned 12.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.