The latest 13F reporting period has come and gone, and 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. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtAmyris Inc (NASDAQ:AMRS) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Hedge fund interest in Amyris Inc (NASDAQ:AMRS) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Arrow Financial Corporation (NASDAQ:AROW), Huize Holding Limited (NASDAQ:HUIZ), and Verastem Inc (NASDAQ:VSTM) to gather more data points. Our calculations also showed that AMRS 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_735677" align="aligncenter" width="400"] Sander Gerber of Hudson Bay Capital[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. 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 we're going to take a look at the latest hedge fund action regarding Amyris Inc (NASDAQ:AMRS).
Hedge fund activity in Amyris Inc (NASDAQ:AMRS)
Heading into the second quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in AMRS over the last 18 quarters. With hedgies' capital changing hands, there exists an "upper tier" of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
The largest stake in Amyris Inc (NASDAQ:AMRS) was held by Vivo Capital, which reported holding $16.6 million worth of stock at the end of September. It was followed by Hudson Bay Capital Management with a $9 million position. Other investors bullish on the company included Roumell Asset Management, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Roumell Asset Management allocated the biggest weight to Amyris Inc (NASDAQ:AMRS), around 3.74% of its 13F portfolio. Vivo Capital is also relatively very bullish on the stock, designating 1.51 percent of its 13F equity portfolio to AMRS.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: D E Shaw. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Roumell Asset Management).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Amyris Inc (NASDAQ:AMRS) but similarly valued. These stocks are Arrow Financial Corporation (NASDAQ:AROW), Huize Holding Limited (NASDAQ:HUIZ), Verastem Inc (NASDAQ:VSTM), and FRP Holdings Inc (NASDAQ:FRPH). This group of stocks' market caps are closest to AMRS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AROW,4,13074,-1 HUIZ,1,262,1 VSTM,17,173703,9 FRPH,7,33574,-1 Average,7.25,55153,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $30 million in AMRS's case. Verastem Inc (NASDAQ:VSTM) is the most popular stock in this table. On the other hand Huize Holding Limited (NASDAQ:HUIZ) is the least popular one with only 1 bullish hedge fund positions. Amyris Inc (NASDAQ:AMRS) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on AMRS as the stock returned 66.8% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.