We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Aptinyx Inc. (NASDAQ:APTX).
Aptinyx Inc. (NASDAQ:APTX) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 8 hedge funds' portfolios at the end of September. At the end of this article we will also compare APTX to other stocks including Smart Sand, Inc. (NASDAQ:SND), Harvard Bioscience, Inc. (NASDAQ:HBIO), and Aptose Biosciences Inc (NASDAQ:APTO) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of methods stock traders can use to analyze their stock investments. Some of the best methods are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the broader indices by a healthy amount (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a gander at the new hedge fund action regarding Aptinyx Inc. (NASDAQ:APTX).
What have hedge funds been doing with Aptinyx Inc. (NASDAQ:APTX)?
At Q3's end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in APTX a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Frazier Healthcare Partners was the largest shareholder of Aptinyx Inc. (NASDAQ:APTX), with a stake worth $11.1 million reported as of the end of September. Trailing Frazier Healthcare Partners was Farallon Capital, which amassed a stake valued at $2.4 million. Marshall Wace, Millennium Management, and Two Sigma Advisors 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 Frazier Healthcare Partners allocated the biggest weight to Aptinyx Inc. (NASDAQ:APTX), around 3.48% of its 13F portfolio. Farallon Capital is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to APTX.
Since Aptinyx Inc. (NASDAQ:APTX) has experienced bearish sentiment from the aggregate hedge fund industry, it's easy to see that there was a specific group of hedgies that decided to sell off their full holdings in the third quarter. Intriguingly, Donald Sussman's Paloma Partners dropped the biggest stake of the 750 funds followed by Insider Monkey, worth an estimated $0.2 million in stock, and Andrew Weiss's Weiss Asset Management was right behind this move, as the fund cut about $0.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to Aptinyx Inc. (NASDAQ:APTX). We will take a look at Smart Sand, Inc. (NASDAQ:SND), Harvard Bioscience, Inc. (NASDAQ:HBIO), Aptose Biosciences Inc (NASDAQ:APTO), and Limestone Bancorp, Inc. (NASDAQ:LMST). This group of stocks' market valuations match APTX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SND,10,5533,3 HBIO,13,26821,2 APTO,7,19612,1 LMST,1,4646,0 Average,7.75,14153,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $16 million in APTX's case. Harvard Bioscience, Inc. (NASDAQ:HBIO) is the most popular stock in this table. On the other hand Limestone Bancorp, Inc. (NASDAQ:LMST) is the least popular one with only 1 bullish hedge fund positions. Aptinyx Inc. (NASDAQ:APTX) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on APTX as the stock returned 16.3% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.