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Applied Molecular Transport Inc. (AMTI) Fell Out Of Favor With Hedge Funds

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  • AMTI

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Applied Molecular Transport Inc. (NASDAQ:AMTI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is Applied Molecular Transport Inc. (NASDAQ:AMTI) a buy, sell, or hold? The smart money was becoming less hopeful. The number of bullish hedge fund positions were trimmed by 1 lately. Applied Molecular Transport Inc. (NASDAQ:AMTI) was in 3 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 8. Our calculations also showed that AMTI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 4 hedge funds in our database with AMTI positions at the end of the fourth quarter.

In the 21st century investor’s toolkit there are tons of gauges stock market investors can use to grade publicly traded companies. A couple of the best gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce their index-focused peers 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 .

Oleg Nodelman EcoR1 Capital
Oleg Nodelman EcoR1 Capital

Oleg Nodelman of EcoR1 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. Now we're going to take a look at the latest hedge fund action surrounding Applied Molecular Transport Inc. (NASDAQ:AMTI).

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

At first quarter's end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMTI over the last 23 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, EcoR1 Capital held the most valuable stake in Applied Molecular Transport Inc. (NASDAQ:AMTI), which was worth $10.5 million at the end of the fourth quarter. On the second spot was Two Sigma Advisors which amassed $0.5 million worth of shares. Laurion Capital Management was 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 EcoR1 Capital allocated the biggest weight to Applied Molecular Transport Inc. (NASDAQ:AMTI), around 0.47% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, designating 0.0013 percent of its 13F equity portfolio to AMTI.

Seeing as Applied Molecular Transport Inc. (NASDAQ:AMTI) has experienced a decline in interest from the smart money, it's easy to see that there is a sect of hedgies that elected to cut their positions entirely last quarter. It's worth mentioning that Arsani William's Logos Capital dropped the biggest investment of all the hedgies followed by Insider Monkey, comprising close to $1.3 million in stock. Israel Englander's fund, Millennium Management, also dropped its stock, about $0.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Applied Molecular Transport Inc. (NASDAQ:AMTI) but similarly valued. We will take a look at Independence Realty Trust Inc (NYSE:IRT), The Greenbrier Companies Inc (NYSE:GBX), Systemax Inc. (NYSE:SYX), TTM Technologies, Inc. (NASDAQ:TTMI), Construction Partners, Inc. (NASDAQ:ROAD), Edgewise Therapeutics, Inc. (NASDAQ:EWTX), and LendingClub Corp (NYSE:LC). This group of stocks' market caps are closest to AMTI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IRT,7,70116,-4 GBX,16,27973,1 SYX,12,36401,-2 TTMI,21,171414,1 ROAD,10,35224,1 EWTX,16,1051885,16 LC,19,264872,1 Average,14.4,236841,2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $237 million. That figure was $11 million in AMTI's case. TTM Technologies, Inc. (NASDAQ:TTMI) is the most popular stock in this table. On the other hand Independence Realty Trust Inc (NYSE:IRT) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Applied Molecular Transport Inc. (NASDAQ:AMTI) is even less popular than IRT. Our overall hedge fund sentiment score for AMTI is 15.3. 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. Hedge funds dodged a bullet by taking a bearish stance towards AMTI. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th but managed to beat the market again by 3.3 percentage points. Unfortunately AMTI wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); AMTI investors were disappointed as the stock returned 3.2% since the end of the first quarter (through 6/11) 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 since 2019.

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

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