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The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Aclaris Therapeutics, Inc. (NASDAQ:ACRS) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Aclaris Therapeutics, Inc. (NASDAQ:ACRS) was in 18 hedge funds' portfolios at the end of June. The all time high for this statistics is 24. ACRS investors should pay attention to an increase in hedge fund interest of late. There were 15 hedge funds in our database with ACRS positions at the end of the first quarter. Our calculations also showed that ACRS isn't among the 30 most popular stocks among hedge funds (click for Q2 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 56 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.
Gavin Saitowitz of Prelude Capital
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 are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 to get excerpts of these letters in your inbox. Now let's take a gander at the recent hedge fund action surrounding Aclaris Therapeutics, Inc. (NASDAQ:ACRS).
What does smart money think about Aclaris Therapeutics, Inc. (NASDAQ:ACRS)?
At Q2's end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ACRS over the last 20 quarters. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, MFN Partners was the largest shareholder of Aclaris Therapeutics, Inc. (NASDAQ:ACRS), with a stake worth $5.4 million reported as of the end of September. Trailing MFN Partners was Renaissance Technologies, which amassed a stake valued at $5.3 million. Samsara BioCapital, Adage Capital Management, and Endurant Capital Management 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 Samsara BioCapital allocated the biggest weight to Aclaris Therapeutics, Inc. (NASDAQ:ACRS), around 1.36% of its 13F portfolio. Parkman Healthcare Partners is also relatively very bullish on the stock, earmarking 0.77 percent of its 13F equity portfolio to ACRS.
As one would reasonably expect, specific money managers have jumped into Aclaris Therapeutics, Inc. (NASDAQ:ACRS) headfirst. Millennium Management, managed by Israel Englander, initiated the largest position in Aclaris Therapeutics, Inc. (NASDAQ:ACRS). Millennium Management had $0.6 million invested in the company at the end of the quarter. Donald Sussman's Paloma Partners also initiated a $0.1 million position during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's go over hedge fund activity in other stocks similar to Aclaris Therapeutics, Inc. (NASDAQ:ACRS). These stocks are Synalloy Corporation (NASDAQ:SYNL), Esports Entertainment Group Inc. (NASDAQ:GMBL), USA Truck, Inc. (NASDAQ:USAK), First National Corporation (NASDAQ:FXNC), TETRA Technologies, Inc. (NYSE:TTI), CohBar, Inc. (NASDAQ:CWBR), and Inspired Entertainment, Inc. (NASDAQ:INSE). This group of stocks' market caps resemble ACRS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SYNL,7,9210,4 GMBL,1,110,1 USAK,3,784,1 FXNC,2,4826,2 TTI,13,10471,7 CWBR,2,671,0 INSE,7,14228,1 Average,5,5757,2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $34 million in ACRS's case. TETRA Technologies, Inc. (NYSE:TTI) is the most popular stock in this table. On the other hand Esports Entertainment Group Inc. (NASDAQ:GMBL) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Aclaris Therapeutics, Inc. (NASDAQ:ACRS) is more popular among hedge funds. Our overall hedge fund sentiment score for ACRS is 80.5. 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 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 returned 24.8% in 2020 through the end of September but still managed to beat the market by 19.3 percentage points. Hedge funds were also right about betting on ACRS as the stock returned 58.6% since the end of June and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.