While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, increasing oil prices and deteriorating expectations towards the resolution of the trade war with China, many smart money investors kept their cautious approach regarding the current bull run in the second quarter and hedging or reducing many of their long positions. Some fund managers like this one are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding AnaptysBio, Inc. (NASDAQ:ANAB).
AnaptysBio, Inc. (NASDAQ:ANAB) shareholders have witnessed a decrease in activity from the world's largest hedge funds of late. Our calculations also showed that ANAB isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are tons of formulas market participants employ to size up publicly traded companies. A duo of the most underrated formulas are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best money managers can trounce their index-focused peers by a solid margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a glance at the recent hedge fund action encompassing AnaptysBio, Inc. (NASDAQ:ANAB).
Hedge fund activity in AnaptysBio, Inc. (NASDAQ:ANAB)
Heading into the third quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in ANAB a year ago. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in AnaptysBio, Inc. (NASDAQ:ANAB), which was worth $144.8 million at the end of the second quarter. On the second spot was Frazier Healthcare Partners which amassed $130.7 million worth of shares. Moreover, Millennium Management, Viking Global, and Cormorant Asset Management were also bullish on AnaptysBio, Inc. (NASDAQ:ANAB), allocating a large percentage of their portfolios to this stock.
Since AnaptysBio, Inc. (NASDAQ:ANAB) has witnessed falling interest from the entirety of the hedge funds we track, it's safe to say that there were a few hedgies who were dropping their entire stakes last quarter. Intriguingly, Ken Greenberg and David Kim's Ghost Tree Capital dumped the biggest stake of the 750 funds followed by Insider Monkey, totaling an estimated $8.4 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund sold off about $2.5 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 4 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to AnaptysBio, Inc. (NASDAQ:ANAB). We will take a look at Sally Beauty Holdings, Inc. (NYSE:SBH), Suburban Propane Partners LP (NYSE:SPH), Safety Insurance Group, Inc. (NASDAQ:SAFT), and Inspire Medical Systems, Inc. (NYSE:INSP). This group of stocks' market values are closest to ANAB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBH,20,117843,1 SPH,4,96526,-1 SAFT,10,47551,-1 INSP,19,287939,1 Average,13.25,137465,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $137 million. That figure was $548 million in ANAB's case. Sally Beauty Holdings, Inc. (NYSE:SBH) is the most popular stock in this table. On the other hand Suburban Propane Partners LP (NYSE:SPH) is the least popular one with only 4 bullish hedge fund positions. AnaptysBio, Inc. (NASDAQ:ANAB) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately ANAB wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ANAB were disappointed as the stock returned -38% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.