The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Cellectis SA (NASDAQ:CLLS).
Is Cellectis SA (NASDAQ:CLLS) the right pick for your portfolio? Money managers are becoming more confident. The number of bullish hedge fund bets rose by 3 recently. Our calculations also showed that CLLS 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
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. We're going to analyze the key hedge fund action surrounding Cellectis SA (NASDAQ:CLLS).
What have hedge funds been doing with Cellectis SA (NASDAQ:CLLS)?
At Q2's end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CLLS over the last 16 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in Cellectis SA (NASDAQ:CLLS) was held by Armistice Capital, which reported holding $12.5 million worth of stock at the end of March. It was followed by Adage Capital Management with a $9 million position. Other investors bullish on the company included Millennium Management, Point72 Asset Management, and Hudson Bay Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Cellectis SA (NASDAQ:CLLS) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most valuable position in Cellectis SA (NASDAQ:CLLS). Marshall Wace LLP had $0.8 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new CLLS investors: Minhua Zhang's Weld Capital Management and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's go over hedge fund activity in other stocks similar to Cellectis SA (NASDAQ:CLLS). We will take a look at Ready Capital Corporation (NYSE:RC), Uxin Limited (NASDAQ:UXIN), Tucows Inc. (NASDAQ:TCX), and Front Yard Residential Corporation (NYSE:RESI). This group of stocks' market valuations are closest to CLLS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RC,6,46073,-8 UXIN,3,24561,-4 TCX,8,49968,-2 RESI,11,43581,-6 Average,7,41046,-5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $31 million in CLLS's case. Front Yard Residential Corporation (NYSE:RESI) is the most popular stock in this table. On the other hand Uxin Limited (NASDAQ:UXIN) is the least popular one with only 3 bullish hedge fund positions. Cellectis SA (NASDAQ:CLLS) 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 CLLS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CLLS were disappointed as the stock returned -33.3% 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.