As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Atreca, Inc. (NASDAQ:BCEL).
Atreca, Inc. (NASDAQ:BCEL) investors should pay attention to an increase in hedge fund sentiment lately. Atreca, Inc. (NASDAQ:BCEL) was in 20 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BCEL isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Kris Jenner of Rock Springs Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. Now let's view the recent hedge fund action surrounding Atreca, Inc. (NASDAQ:BCEL).
Do Hedge Funds Think BCEL Is A Good Stock To Buy Now?
At second quarter's end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BCEL over the last 24 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
The largest stake in Atreca, Inc. (NASDAQ:BCEL) was held by Baker Bros. Advisors, which reported holding $30.1 million worth of stock at the end of June. It was followed by Redmile Group with a $21 million position. Other investors bullish on the company included EcoR1 Capital, Citadel Investment Group, and Rock Springs Capital Management. In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Atreca, Inc. (NASDAQ:BCEL), around 0.77% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, dishing out 0.42 percent of its 13F equity portfolio to BCEL.
With a general bullishness amongst the heavyweights, key money managers have jumped into Atreca, Inc. (NASDAQ:BCEL) headfirst. Ikarian Capital, managed by Neil Shahrestani, established the most outsized position in Atreca, Inc. (NASDAQ:BCEL). Ikarian Capital had $2.1 million invested in the company at the end of the quarter. Renaissance Technologies also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Frank Fu's CaaS Capital, Paul Marshall and Ian Wace's Marshall Wace LLP, and Michael Gelband's ExodusPoint Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Atreca, Inc. (NASDAQ:BCEL) but similarly valued. These stocks are Mid Penn Bancorp, Inc. (NASDAQ:MPB), LifeMD, Inc. (NASDAQ:LFMD), Wrap Technologies, Inc. (NASDAQ:WRAP), Braemar Hotels & Resorts Inc. (NYSE:BHR), Cerecor Inc. (NASDAQ:CERC), Cogent Biosciences, Inc. (NASDAQ:COGT), and Limoneira Company (NASDAQ:LMNR). This group of stocks' market caps are closest to BCEL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MPB,8,12592,4 LFMD,8,30430,2 WRAP,5,4147,1 BHR,22,58296,5 CERC,10,170042,0 COGT,19,142338,-8 LMNR,4,2377,2 Average,10.9,60032,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $100 million in BCEL's case. Braemar Hotels & Resorts Inc. (NYSE:BHR) is the most popular stock in this table. On the other hand Limoneira Company (NASDAQ:LMNR) is the least popular one with only 4 bullish hedge fund positions. Atreca, Inc. (NASDAQ:BCEL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BCEL is 82.4. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately BCEL wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BCEL were disappointed as the stock returned -33.6% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.