We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 835 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article we look at what those investors think of MyoKardia, Inc. (NASDAQ:MYOK).
MyoKardia, Inc. (NASDAQ:MYOK) was in 26 hedge funds' portfolios at the end of the fourth quarter of 2019. MYOK investors should be aware of an increase in enthusiasm from smart money recently. There were 25 hedge funds in our database with MYOK positions at the end of the previous quarter. Our calculations also showed that MYOK isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the 21st century investor’s toolkit there are a large number of methods stock traders employ to appraise their holdings. A pair of the less known methods are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best fund managers can outpace the market by a superb amount (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic's significance before most investors. Keeping this in mind let's take a glance at the fresh hedge fund action regarding MyoKardia, Inc. (NASDAQ:MYOK).
How are hedge funds trading MyoKardia, Inc. (NASDAQ:MYOK)?
Heading into the first quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MYOK over the last 18 quarters. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, Farallon Capital was the largest shareholder of MyoKardia, Inc. (NASDAQ:MYOK), with a stake worth $149.4 million reported as of the end of September. Trailing Farallon Capital was Baker Bros. Advisors, which amassed a stake valued at $129.3 million. venBio Select Advisor, Perceptive Advisors, and Casdin Capital 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 Foresite Capital allocated the biggest weight to MyoKardia, Inc. (NASDAQ:MYOK), around 13.34% of its 13F portfolio. Casdin Capital is also relatively very bullish on the stock, earmarking 6.74 percent of its 13F equity portfolio to MYOK.
As industrywide interest jumped, specific money managers were breaking ground themselves. Logos Capital, managed by Arsani William, initiated the biggest position in MyoKardia, Inc. (NASDAQ:MYOK). Logos Capital had $16.8 million invested in the company at the end of the quarter. Kris Jenner, Gordon Bussard, Graham McPhail's Rock Springs Capital Management also initiated a $11.7 million position during the quarter. The following funds were also among the new MYOK investors: Michael Rockefeller and Karl Kroeker's Woodline Partners, David Harding's Winton Capital Management, and Kamran Moghtaderi's Eversept Partners.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as MyoKardia, Inc. (NASDAQ:MYOK) but similarly valued. These stocks are GrafTech International Ltd. (NYSE:EAF), Brookfield Business Partners L.P. (NYSE:BBU), SmileDirectClub, Inc. (NASDAQ:SDC), and Cloudera, Inc. (NYSE:CLDR). This group of stocks' market caps match MYOK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EAF,33,241631,6 BBU,4,9985,-2 SDC,20,139860,-9 CLDR,22,809760,-5 Average,19.75,300309,-2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $300 million. That figure was $934 million in MYOK's case. GrafTech International Ltd. (NYSE:EAF) is the most popular stock in this table. On the other hand Brookfield Business Partners L.P. (NYSE:BBU) is the least popular one with only 4 bullish hedge fund positions. MyoKardia, Inc. (NASDAQ:MYOK) 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but beat the market by 5.5 percentage points. Unfortunately MYOK wasn't nearly as popular as these 20 stocks and hedge funds that were betting on MYOK were disappointed as the stock returned -32% during the same time period 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. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.