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Hedge Funds Piled Into CRISPR Therapeutics AG (CRSP) At The Wrong Time

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  • CRSP

We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of CRISPR Therapeutics AG (NASDAQ:CRSP) based on that data.

Is CRISPR Therapeutics AG (NASDAQ:CRSP) a buy right now? Investors who are in the know were in an optimistic mood. The number of long hedge fund positions rose by 9 in recent months. CRISPR Therapeutics AG (NASDAQ:CRSP) was in 43 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 34. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CRSP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 34 hedge funds in our database with CRSP positions at the end of the second quarter.

Matthew Hulsizer PEAK6 Capital
Matthew Hulsizer PEAK6 Capital

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let's take a gander at the new hedge fund action encompassing CRISPR Therapeutics AG (NASDAQ:CRSP).

Do Hedge Funds Think CRSP Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CRSP over the last 25 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is CRSP A Good Stock To Buy?
Is CRSP A Good Stock To Buy?

Among these funds, ARK Investment Management held the most valuable stake in CRISPR Therapeutics AG (NASDAQ:CRSP), which was worth $849.1 million at the end of the third quarter. On the second spot was OrbiMed Advisors which amassed $68.6 million worth of shares. Armistice Capital, Citadel Investment Group, and Valiant Capital 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 Valiant Capital allocated the biggest weight to CRISPR Therapeutics AG (NASDAQ:CRSP), around 3.33% of its 13F portfolio. ARK Investment Management is also relatively very bullish on the stock, earmarking 2.04 percent of its 13F equity portfolio to CRSP.

Now, key money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in CRISPR Therapeutics AG (NASDAQ:CRSP). Marshall Wace LLP had $28.6 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also made a $5.2 million investment in the stock during the quarter. The other funds with brand new CRSP positions are Noam Gottesman's GLG Partners, Paul Tudor Jones's Tudor Investment Corp, and Mika Toikka's AlphaCrest Capital Management.

Let's go over hedge fund activity in other stocks similar to CRISPR Therapeutics AG (NASDAQ:CRSP). These stocks are Jabil Inc. (NYSE:JBL), Vertiv Holdings Co (NYSE:VRT), Knight-Swift Transportation Holdings Inc. (NYSE:KNX), Hyatt Hotels Corporation (NYSE:H), IPG Photonics Corporation (NASDAQ:IPGP), DXC Technology Company (NYSE:DXC), and Bright Horizons Family Solutions Inc (NYSE:BFAM). This group of stocks' market caps resemble CRSP's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JBL,27,517374,1 VRT,36,811401,0 KNX,21,261747,-5 H,37,1003042,14 IPGP,25,435718,2 DXC,33,644520,3 BFAM,21,96786,4 Average,28.6,538655,2.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $539 million. That figure was $1216 million in CRSP's case. Hyatt Hotels Corporation (NYSE:H) is the most popular stock in this table. On the other hand Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks CRISPR Therapeutics AG (NASDAQ:CRSP) is more popular among hedge funds. Our overall hedge fund sentiment score for CRSP is 90. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately CRSP wasn't nearly as popular as these 5 stocks and hedge funds that were betting on CRSP were disappointed as the stock returned -28.6% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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