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Hedge Funds Have Never Been This Bullish On Atara Biotherapeutics Inc (ATRA)

Abigail Fisher
·5 min read

In this article we will check out the progression of hedge fund sentiment towards Atara Biotherapeutics Inc (NASDAQ:ATRA) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Atara Biotherapeutics Inc (NASDAQ:ATRA) investors should be aware of an increase in support from the world's most elite money managers in recent months. ATRA was in 17 hedge funds' portfolios at the end of the first quarter of 2020. There were 16 hedge funds in our database with ATRA holdings at the end of the previous quarter. Our calculations also showed that ATRA 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.

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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.

[caption id="attachment_27666" align="aligncenter" width="399"] Roberto Mignone of Bridger Management[/caption]

BRIDGER MANAGEMENT
BRIDGER MANAGEMENT

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. Now let's view the new hedge fund action regarding Atara Biotherapeutics Inc (NASDAQ:ATRA).

How are hedge funds trading Atara Biotherapeutics Inc (NASDAQ:ATRA)?

At Q1's end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ATRA over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Atara Biotherapeutics Inc (NASDAQ:ATRA) was held by Baupost Group, which reported holding $70.7 million worth of stock at the end of September. It was followed by Redmile Group with a $45 million position. Other investors bullish on the company included Maverick Capital, Bridger Management, and Farallon Capital. In terms of the portfolio weights assigned to each position Bridger Management allocated the biggest weight to Atara Biotherapeutics Inc (NASDAQ:ATRA), around 2.21% of its 13F portfolio. Antipodean Advisors is also relatively very bullish on the stock, dishing out 1.74 percent of its 13F equity portfolio to ATRA.

With a general bullishness amongst the heavyweights, key money managers have jumped into Atara Biotherapeutics Inc (NASDAQ:ATRA) headfirst. Slate Path Capital, managed by David Greenspan, assembled the most valuable position in Atara Biotherapeutics Inc (NASDAQ:ATRA). Slate Path Capital had $3.6 million invested in the company at the end of the quarter. Eric Chen's Antipodean Advisors also initiated a $1.9 million position during the quarter. The other funds with brand new ATRA positions are Adam Usdan's Trellus Management Company, Renaissance Technologies, and Mike Vranos's Ellington.

Let's check out hedge fund activity in other stocks similar to Atara Biotherapeutics Inc (NASDAQ:ATRA). We will take a look at MeiraGTx Holdings plc (NASDAQ:MGTX), ANI Pharmaceuticals Inc (NASDAQ:ANIP), FutureFuel Corp. (NYSE:FF), and Trueblue Inc (NYSE:TBI). All of these stocks' market caps are similar to ATRA's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MGTX,17,170760,-4 ANIP,12,47914,-1 FF,11,45441,1 TBI,10,32248,-5 Average,12.5,74091,-2.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $220 million in ATRA's case. MeiraGTx Holdings plc (NASDAQ:MGTX) is the most popular stock in this table. On the other hand Trueblue Inc (NYSE:TBI) is the least popular one with only 10 bullish hedge fund positions. Atara Biotherapeutics Inc (NASDAQ:ATRA) 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 ATRA as the stock returned 39.1% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.

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