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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at 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. In this article we look at what those investors think of Cerus Corporation (NASDAQ:CERS).
Is Cerus Corporation (NASDAQ:CERS) a great stock to buy now? Prominent investors are taking an optimistic view. The number of bullish hedge fund bets moved up by 5 lately. Our calculations also showed that CERS 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). CERS was in 17 hedge funds' portfolios at the end of the first quarter of 2020. There were 12 hedge funds in our database with CERS holdings at the end of the previous quarter.
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.
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James E. Flynn of Deerfield Management[/caption]
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. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to check out the fresh hedge fund action regarding Cerus Corporation (NASDAQ:CERS).
How are hedge funds trading Cerus Corporation (NASDAQ:CERS)?
At Q1's end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 42% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CERS over the last 18 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the most valuable position in Cerus Corporation (NASDAQ:CERS). Baker Bros. Advisors has a $63.8 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Deerfield Management, led by James E. Flynn, holding a $10.3 million position; 0.3% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions consist of Israel Englander's Millennium Management, Mark Coe's Intrinsic Edge Capital and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Intrinsic Edge Capital allocated the biggest weight to Cerus Corporation (NASDAQ:CERS), around 1.13% of its 13F portfolio. Pura Vida Investments is also relatively very bullish on the stock, dishing out 0.8 percent of its 13F equity portfolio to CERS.
As industrywide interest jumped, key money managers were breaking ground themselves. Deerfield Management, managed by James E. Flynn, initiated the most valuable position in Cerus Corporation (NASDAQ:CERS). Deerfield Management had $10.3 million invested in the company at the end of the quarter. Mark Coe's Intrinsic Edge Capital also initiated a $8.5 million position during the quarter. The other funds with brand new CERS positions are Efrem Kamen's Pura Vida Investments, Steve Cohen's Point72 Asset Management, and Donald Sussman's Paloma Partners.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Cerus Corporation (NASDAQ:CERS) but similarly valued. We will take a look at Teekay Tankers Ltd. (NYSE:TNK), Oyster Point Pharma, Inc. (NASDAQ:OYST), Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT), and Berkshire Hills Bancorp, Inc. (NYSE:BHLB). This group of stocks' market caps match CERS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TNK,21,66975,2 OYST,4,1827,1 PHAT,6,311386,-1 BHLB,15,23209,6 Average,11.5,100849,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $106 million in CERS's case. Teekay Tankers Ltd. (NYSE:TNK) is the most popular stock in this table. On the other hand Oyster Point Pharma, Inc. (NASDAQ:OYST) is the least popular one with only 4 bullish hedge fund positions. Cerus Corporation (NASDAQ:CERS) 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 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on CERS as the stock returned 40.9% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.