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In this article we will analyze whether LogicBio Therapeutics, Inc. (NASDAQ:LOGC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is LOGC a good stock to buy? LogicBio Therapeutics, Inc. (NASDAQ:LOGC) investors should pay attention to a decrease in activity from the world's largest hedge funds in recent months. LogicBio Therapeutics, Inc. (NASDAQ:LOGC) was in 6 hedge funds' portfolios at the end of March. The all time high for this statistic is 8. Our calculations also showed that LOGC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
According to most shareholders, hedge funds are perceived as slow, old investment tools of the past. While there are greater than 8000 funds in operation at the moment, Our researchers choose to focus on the top tier of this group, about 850 funds. It is estimated that this group of investors manage most of the smart money's total asset base, and by watching their best investments, Insider Monkey has formulated various investment strategies that have historically outstripped the market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per 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 .
Oleg Nodelman of EcoR1 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we're going to review the recent hedge fund action surrounding LogicBio Therapeutics, Inc. (NASDAQ:LOGC).
Do Hedge Funds Think LOGC Is A Good Stock To Buy Now?
At first quarter's end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LOGC over the last 23 quarters. With hedgies' capital changing hands, there exists an "upper tier" of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in LogicBio Therapeutics, Inc. (NASDAQ:LOGC) was held by OrbiMed Advisors, which reported holding $61.6 million worth of stock at the end of December. It was followed by Samlyn Capital with a $10.2 million position. Other investors bullish on the company included EcoR1 Capital, Lion Point, and Baker Bros. Advisors. In terms of the portfolio weights assigned to each position Lion Point allocated the biggest weight to LogicBio Therapeutics, Inc. (NASDAQ:LOGC), around 0.66% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, designating 0.58 percent of its 13F equity portfolio to LOGC.
Because LogicBio Therapeutics, Inc. (NASDAQ:LOGC) has witnessed declining sentiment from hedge fund managers, we can see that there exists a select few hedge funds that decided to sell off their full holdings by the end of the first quarter. Intriguingly, Israel Englander's Millennium Management dumped the biggest stake of the 750 funds watched by Insider Monkey, totaling about $0.5 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund dumped about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds by the end of the first quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as LogicBio Therapeutics, Inc. (NASDAQ:LOGC) but similarly valued. We will take a look at PCB Bancorp (NASDAQ:PCB), Hurco Companies, Inc. (NASDAQ:HURC), Bluerock Residential Growth REIT Inc (NYSE:BRG), Alta Mesa Resources, Inc. (NASDAQ:AMR), Leaf Group Ltd (NYSE:LEAF), IntriCon Corporation (NASDAQ:IIN), and Central Valley Community Bancorp (NASDAQ:CVCY). This group of stocks' market valuations match LOGC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PCB,4,29911,-1 HURC,7,41714,4 BRG,7,7011,4 AMR,19,65061,0 LEAF,15,66994,-5 IIN,3,39969,0 CVCY,3,4657,-1 Average,8.3,36474,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.3 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $86 million in LOGC's case. Alta Mesa Resources, Inc. (NASDAQ:AMR) is the most popular stock in this table. On the other hand IntriCon Corporation (NASDAQ:IIN) is the least popular one with only 3 bullish hedge fund positions. LogicBio Therapeutics, Inc. (NASDAQ:LOGC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LOGC is 34.9. 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 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately LOGC wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); LOGC investors were disappointed as the stock returned -39.3% since the end of March (through 6/25) 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.