Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors' favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the third quarter. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds' top consensus picks. This year hedge funds' top 20 stock picks outperformed the S&P 500 Index by 4 percentage points through September 30th. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
DBV Technologies SA - ADR (NASDAQ:DBVT) was in 10 hedge funds' portfolios at the end of the second quarter of 2019. DBVT investors should be aware of an increase in activity from the world's largest hedge funds lately. There were 8 hedge funds in our database with DBVT positions at the end of the previous quarter. Our calculations also showed that DBVT 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.
In the eyes of most stock holders, hedge funds are perceived as underperforming, outdated investment tools of years past. While there are more than 8000 funds trading today, Our experts choose to focus on the elite of this club, about 750 funds. These investment experts have their hands on most of the smart money's total capital, and by watching their first-class picks, Insider Monkey has spotted numerous investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
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. We're going to view the fresh hedge fund action regarding DBV Technologies SA - ADR (NASDAQ:DBVT).
How are hedge funds trading DBV Technologies SA - ADR (NASDAQ:DBVT)?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DBVT over the last 16 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baker Bros. Advisors held the most valuable stake in DBV Technologies SA - ADR (NASDAQ:DBVT), which was worth $45.3 million at the end of the second quarter. On the second spot was Perceptive Advisors which amassed $29.7 million worth of shares. Moreover, Deerfield Management, Vivo Capital, and Bailard Inc were also bullish on DBV Technologies SA - ADR (NASDAQ:DBVT), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, initiated the largest position in DBV Technologies SA - ADR (NASDAQ:DBVT). Point72 Asset Management had $1.4 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Minhua Zhang's Weld Capital Management.
Let's check out hedge fund activity in other stocks similar to DBV Technologies SA - ADR (NASDAQ:DBVT). We will take a look at Ingles Markets, Incorporated (NASDAQ:IMKTA), Weidai Ltd. (NYSE:WEI), Midland States Bancorp, Inc. (NASDAQ:MSBI), and Cytokinetics, Incorporated (NASDAQ:CYTK). This group of stocks' market valuations match DBVT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IMKTA,13,45991,2 WEI,1,381,0 MSBI,6,3340,2 CYTK,14,138145,-2 Average,8.5,46964,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $109 million in DBVT's case. Cytokinetics, Incorporated (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Weidai Ltd. (NYSE:WEI) is the least popular one with only 1 bullish hedge fund positions. DBV Technologies SA - ADR (NASDAQ:DBVT) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on DBVT, though not to the same extent, as the stock returned 4.6% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.