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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Athersys, Inc. (NASDAQ:ATHX) based on those filings.
Athersys, Inc. (NASDAQ:ATHX) investors should pay attention to an increase in hedge fund interest in recent months. ATHX was in 8 hedge funds' portfolios at the end of March. There were 7 hedge funds in our database with ATHX holdings at the end of the previous quarter. Our calculations also showed that ATHX 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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Philip Hempleman of Ardsley Partners[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a look at the fresh hedge fund action surrounding Athersys, Inc. (NASDAQ:ATHX).
What have hedge funds been doing with Athersys, Inc. (NASDAQ:ATHX)?
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ATHX over the last 18 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Athersys, Inc. (NASDAQ:ATHX), which was worth $2.9 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $0.3 million worth of shares. Citadel Investment Group, HighVista Strategies, and Winton 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 HighVista Strategies allocated the biggest weight to Athersys, Inc. (NASDAQ:ATHX), around 0.15% of its 13F portfolio. Ardsley Partners is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to ATHX.
As one would reasonably expect, some big names were leading the bulls' herd. D E Shaw, managed by D. E. Shaw, created the largest position in Athersys, Inc. (NASDAQ:ATHX). D E Shaw had $0.1 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $0.1 million position during the quarter. The only other fund with a brand new ATHX position is Philip Hempleman's Ardsley Partners.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Athersys, Inc. (NASDAQ:ATHX) but similarly valued. We will take a look at Solar Capital Ltd. (NASDAQ:SLRC), ACCO Brands Corporation (NYSE:ACCO), A10 Networks Inc (NYSE:ATEN), and Vermilion Energy Inc (NYSE:VET). This group of stocks' market caps are closest to ATHX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SLRC,15,28444,-1 ACCO,18,26582,0 ATEN,19,110335,1 VET,8,1314,0 Average,15,41669,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $4 million in ATHX's case. A10 Networks Inc (NYSE:ATEN) is the most popular stock in this table. On the other hand Vermilion Energy Inc (NYSE:VET) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Athersys, Inc. (NASDAQ:ATHX) is even less popular than VET. Hedge funds dodged a bullet by taking a bearish stance towards ATHX. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but managed to beat the market by 14.8 percentage points. Unfortunately ATHX wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ATHX investors were disappointed as the stock returned -2% during the second quarter (through June 17th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.