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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Eidos Therapeutics, Inc. (NASDAQ:EIDX) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Eidos Therapeutics, Inc. (NASDAQ:EIDX) has experienced an increase in support from the world's most elite money managers lately. EIDX was in 11 hedge funds' portfolios at the end of June. There were 8 hedge funds in our database with EIDX holdings at the end of the previous quarter. Our calculations also showed that EIDX 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 take a look at the fresh hedge fund action regarding Eidos Therapeutics, Inc. (NASDAQ:EIDX).
How are hedge funds trading Eidos Therapeutics, Inc. (NASDAQ:EIDX)?
At the end of the second quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the previous quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in EIDX a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, RA Capital Management, managed by Peter Kolchinsky, holds the number one position in Eidos Therapeutics, Inc. (NASDAQ:EIDX). RA Capital Management has a $112.7 million position in the stock, comprising 6.1% of its 13F portfolio. Coming in second is Viking Global, led by Andreas Halvorsen, holding a $27.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Other peers with similar optimism encompass Jeremy Green's Redmile Group, Joseph Edelman's Perceptive Advisors and Bihua Chen's Cormorant Asset Management.
Now, key hedge funds have jumped into Eidos Therapeutics, Inc. (NASDAQ:EIDX) headfirst. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, created the most valuable position in Eidos Therapeutics, Inc. (NASDAQ:EIDX). Polar Capital had $3.4 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also initiated a $0.9 million position during the quarter. The only other fund with a new position in the stock is Renaissance Technologies.
Let's check out hedge fund activity in other stocks similar to Eidos Therapeutics, Inc. (NASDAQ:EIDX). These stocks are Tompkins Financial Corporation (NYSE:TMP), Safehold Inc. (NYSE:SAFE), Corcept Therapeutics Incorporated (NASDAQ:CORT), and Trupanion Inc (NASDAQ:TRUP). All of these stocks' market caps match EIDX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TMP,5,20068,0 SAFE,3,3970,2 CORT,17,123655,-1 TRUP,10,163287,-3 Average,8.75,77745,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $222 million in EIDX's case. Corcept Therapeutics Incorporated (NASDAQ:CORT) is the most popular stock in this table. On the other hand Safehold Inc. (NYSE:SAFE) is the least popular one with only 3 bullish hedge fund positions. Eidos Therapeutics, Inc. (NASDAQ:EIDX) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on EIDX as the stock returned 15.7% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.