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Is Pacific Biosciences of California, Inc. (NASDAQ:PACB) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Pacific Biosciences of California, Inc. (NASDAQ:PACB) has seen an increase in hedge fund interest in recent months. Pacific Biosciences of California, Inc. (NASDAQ:PACB) was in 24 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 25. Our calculations also showed that PACB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
According to most traders, hedge funds are assumed to be underperforming, outdated financial tools of the past. While there are greater than 8000 funds with their doors open at the moment, Our researchers hone in on the moguls of this group, about 850 funds. Most estimates calculate that this group of people orchestrate most of all hedge funds' total capital, and by keeping track of their top investments, Insider Monkey has unearthed a number of investment strategies that have historically outperformed the market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Cathie Wood of ARK Investment Management
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Do Hedge Funds Think PACB Is A Good Stock To Buy Now?
At the end of March, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PACB over the last 23 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, ARK Investment Management was the largest shareholder of Pacific Biosciences of California, Inc. (NASDAQ:PACB), with a stake worth $709.5 million reported as of the end of March. Trailing ARK Investment Management was SB Management, which amassed a stake valued at $328.5 million. Casdin Capital, Baker Bros. Advisors, and Iron Triangle Partners 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 Casdin Capital allocated the biggest weight to Pacific Biosciences of California, Inc. (NASDAQ:PACB), around 4.96% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, designating 3.96 percent of its 13F equity portfolio to PACB.
As one would reasonably expect, key money managers have been driving this bullishness. Renaissance Technologies, initiated the most outsized position in Pacific Biosciences of California, Inc. (NASDAQ:PACB). Renaissance Technologies had $26.1 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also made a $7.7 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw's D E Shaw, Andrew Sandler's Sandler Capital Management, and Kenneth Tropin's Graham Capital Management.
Let's go over hedge fund activity in other stocks similar to Pacific Biosciences of California, Inc. (NASDAQ:PACB). We will take a look at FirstService Corporation (NASDAQ:FSV), Huntsman Corporation (NYSE:HUN), eXp World Holdings, Inc. (NASDAQ:EXPI), Apartment Income REIT Corp. (NYSE:AIRC), Sonoco Products Company (NYSE:SON), MDU Resources Group Inc (NYSE:MDU), and WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC). All of these stocks' market caps are similar to PACB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FSV,17,238970,1 HUN,35,735950,6 EXPI,15,171695,-5 AIRC,14,210803,-3 SON,25,157746,5 MDU,21,162814,1 WSC,47,1271017,12 Average,24.9,421285,2.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $421 million. That figure was $1493 million in PACB's case. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is the most popular stock in this table. On the other hand Apartment Income REIT Corp. (NYSE:AIRC) is the least popular one with only 14 bullish hedge fund positions. Pacific Biosciences of California, Inc. (NASDAQ:PACB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PACB is 50. 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 negative signal and 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately PACB wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PACB investors were disappointed as the stock returned -20.5% since the end of March (through 7/16) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.