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After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Cellectis SA (NASDAQ:CLLS).
Is Cellectis SA (NASDAQ:CLLS) going to take off soon? Money managers were becoming less confident. The number of bullish hedge fund bets shrunk by 5 recently. Cellectis SA (NASDAQ:CLLS) was in 8 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. Our calculations also showed that CLLS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 13 hedge funds in our database with CLLS holdings at the end of June.
Video: 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 S&P 500 ETFs by more than 66 percentage points since March 2017 (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 stocks that are in our short portfolio.
Henrik Rhenman of Rhenman & Partners Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let's take a glance at the new hedge fund action encompassing Cellectis SA (NASDAQ:CLLS).
How are hedge funds trading Cellectis SA (NASDAQ:CLLS)?
Heading into the fourth quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -38% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CLLS over the last 21 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Cellectis SA (NASDAQ:CLLS), with a stake worth $5.4 million reported as of the end of September. Trailing Millennium Management was 683 Capital Partners, which amassed a stake valued at $3.7 million. Prosight Capital, Rhenman & Partners Asset Management, and D E Shaw 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 Prosight Capital allocated the biggest weight to Cellectis SA (NASDAQ:CLLS), around 1.63% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, earmarking 0.27 percent of its 13F equity portfolio to CLLS.
Due to the fact that Cellectis SA (NASDAQ:CLLS) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there lies a certain "tier" of fund managers that elected to cut their positions entirely last quarter. It's worth mentioning that Phill Gross and Robert Atchinson's Adage Capital Management dumped the biggest stake of the "upper crust" of funds tracked by Insider Monkey, worth close to $5.3 million in stock. Neil Shahrestani's fund, Ikarian Capital, also dumped its stock, about $1.3 million worth. These moves are important to note, as total hedge fund interest dropped by 5 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Cellectis SA (NASDAQ:CLLS) but similarly valued. These stocks are 1st Source Corporation (NASDAQ:SRCE), RAPT Therapeutics, Inc. (NASDAQ:RAPT), Akouos, Inc. (NASDAQ:AKUS), Gogo Inc (NASDAQ:GOGO), World Acceptance Corp. (NASDAQ:WRLD), PAE Incorporated (NASDAQ:PAE), and Douglas Dynamics Inc (NYSE:PLOW). All of these stocks' market caps match CLLS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SRCE,10,19677,0 RAPT,16,45437,9 AKUS,12,178200,-8 GOGO,14,165265,-4 WRLD,12,137504,0 PAE,17,107936,0 PLOW,7,4584,0 Average,12.6,94086,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $20 million in CLLS's case. PAE Incorporated (NASDAQ:PAE) is the most popular stock in this table. On the other hand Douglas Dynamics Inc (NYSE:PLOW) is the least popular one with only 7 bullish hedge fund positions. Cellectis SA (NASDAQ:CLLS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CLLS is 21. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on CLLS as the stock returned 43.7% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.