"Value has performed relatively poorly since the 2017 shift, but we believe challenges to the S&P 500’s dominance are mounting and resulting active opportunities away from the index are growing. At some point, this fault line will break, likely on the back of rising rates, and all investors will be reminded that the best time to diversify away from the winners is when it is most painful. The bargain of capturing long-term value may be short-term pain, but enough is eventually enough and it comes time to harvest the benefits.," said Clearbridge Investments in its market commentary. We aren't sure whether long-term interest rates will top 5% and value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That's why we believe it would be worthwhile to take a look at the hedge fund sentiment on AC Immune SA (NASDAQ:ACIU) in order to identify whether reputable and successful top money managers continue to believe in its potential.
AC Immune SA (NASDAQ:ACIU) shareholders have witnessed a decrease in activity from the world's largest hedge funds lately. ACIU was in 8 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 9 hedge funds in our database with ACIU positions at the end of the previous quarter. Our calculations also showed that ACIU isn't among the 30 most popular stocks among hedge funds.
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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to analyze the key hedge fund action encompassing AC Immune SA (NASDAQ:ACIU).
What have hedge funds been doing with AC Immune SA (NASDAQ:ACIU)?
Heading into the first quarter of 2019, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the previous quarter. On the other hand, there were a total of 4 hedge funds with a bullish position in ACIU 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.
Among these funds, Duquesne Capital held the most valuable stake in AC Immune SA (NASDAQ:ACIU), which was worth $23.5 million at the end of the fourth quarter. On the second spot was Biotechnology Value Fund / BVF Inc which amassed $21.1 million worth of shares. Moreover, OrbiMed Advisors, Marshall Wace LLP, and Citadel Investment Group were also bullish on AC Immune SA (NASDAQ:ACIU), allocating a large percentage of their portfolios to this stock.
Seeing as AC Immune SA (NASDAQ:ACIU) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedge funds who were dropping their full holdings in the third quarter. Interestingly, Zach Schreiber's Point State Capital dropped the biggest investment of all the hedgies monitored by Insider Monkey, worth close to $4.5 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital was right behind this move, as the fund cut about $0.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the third quarter.
Let's now review hedge fund activity in other stocks similar to AC Immune SA (NASDAQ:ACIU). We will take a look at GoPro Inc (NASDAQ:GPRO), Funko, Inc. (NASDAQ:FNKO), Nova Measuring Instruments Ltd. (NASDAQ:NVMI), and Civitas Solutions Inc (NYSE:CIVI). All of these stocks' market caps match ACIU's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GPRO,13,47714,-1 FNKO,13,39529,3 NVMI,9,74480,0 CIVI,15,76552,3 Average,12.5,59569,1.25 [/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 $60 million. That figure was $71 million in ACIU's case. Civitas Solutions Inc (NYSE:CIVI) is the most popular stock in this table. On the other hand Nova Measuring Instruments Ltd. (NASDAQ:NVMI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks AC Immune SA (NASDAQ:ACIU) is even less popular than NVMI. Hedge funds dodged a bullet by taking a bearish stance towards ACIU. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately ACIU wasn't nearly as popular as these 15 stock (hedge fund sentiment was very bearish); ACIU investors were disappointed as the stock returned -49.6% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.