World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients' money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It's not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It's also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Autolus Therapeutics plc (NASDAQ:AUTL) shareholders have witnessed an increase in hedge fund interest in recent months. AUTL was in 13 hedge funds' portfolios at the end of the second quarter of 2019. There were 6 hedge funds in our database with AUTL holdings at the end of the previous quarter. Our calculations also showed that AUTL isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are a large number of methods stock traders have at their disposal to grade publicly traded companies. A duo of the best methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top money managers can outperform the S&P 500 by a healthy margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's view the latest hedge fund action surrounding Autolus Therapeutics plc (NASDAQ:AUTL).
What does smart money think about Autolus Therapeutics plc (NASDAQ:AUTL)?
Heading into the third quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 117% from one quarter earlier. On the other hand, there were a total of 14 hedge funds with a bullish position in AUTL a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Woodford Investment Management, managed by Neil Woodford, holds the number one position in Autolus Therapeutics plc (NASDAQ:AUTL). Woodford Investment Management has a $186.7 million position in the stock, comprising 31.6% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which holds a $12.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish comprise Bihua Chen's Cormorant Asset Management, Paul Marshall and Ian Wace's Marshall Wace LLP and Julian Baker and Felix Baker's Baker Bros. Advisors.
As industrywide interest jumped, key hedge funds were leading the bulls' herd. Sand Grove Capital Partners, managed by Simon Davies, established the most outsized position in Autolus Therapeutics plc (NASDAQ:AUTL). Sand Grove Capital Partners had $1.6 million invested in the company at the end of the quarter. Nathan Fischel's DAFNA Capital Management also made a $1.6 million investment in the stock during the quarter. The other funds with brand new AUTL positions are Anand Parekh's Alyeska Investment Group, Renaissance Technologies, and Ken Griffin's Citadel Investment Group.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Autolus Therapeutics plc (NASDAQ:AUTL) but similarly valued. We will take a look at Party City Holdco Inc (NYSE:PRTY), Zumiez Inc. (NASDAQ:ZUMZ), Cohu, Inc. (NASDAQ:COHU), and Just Energy Group, Inc. (NYSE:JE). All of these stocks' market caps are closest to AUTL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRTY,10,57958,-9 ZUMZ,16,56669,3 COHU,10,50030,-3 JE,13,45371,3 Average,12.25,52507,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $230 million in AUTL's case. Zumiez Inc. (NASDAQ:ZUMZ) is the most popular stock in this table. On the other hand Party City Holdco Inc (NYSE:PRTY) is the least popular one with only 10 bullish hedge fund positions. Autolus Therapeutics plc (NASDAQ:AUTL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately AUTL wasn't nearly as popular as these 20 stocks and hedge funds that were betting on AUTL were disappointed as the stock returned -22.9% during the third 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 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.