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Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks aren't doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Passage Bio, Inc. (NASDAQ:PASG) changed recently.
Is PASG a good stock to buy now? Passage Bio, Inc. (NASDAQ:PASG) was in 15 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 17. PASG shareholders have witnessed an increase in hedge fund sentiment of late. There were 13 hedge funds in our database with PASG holdings at the end of June. Our calculations also showed that PASG isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are tons of methods stock traders use to evaluate publicly traded companies. A duo of the most innovative methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outclass the S&P 500 by a superb margin (see the details here).
Israel Englander of Millennium Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let's take a look at the new hedge fund action regarding Passage Bio, Inc. (NASDAQ:PASG).
Do Hedge Funds Think PASG Is A Good Stock To Buy Now?
At Q3's end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PASG over the last 21 quarters. With hedgies' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds, OrbiMed Advisors held the most valuable stake in Passage Bio, Inc. (NASDAQ:PASG), which was worth $91.3 million at the end of the third quarter. On the second spot was Frazier Healthcare Partners which amassed $65.7 million worth of shares. Vivo Capital, Highline Capital Management, and Logos 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 Highline Capital Management allocated the biggest weight to Passage Bio, Inc. (NASDAQ:PASG), around 7.88% of its 13F portfolio. Frazier Healthcare Partners is also relatively very bullish on the stock, earmarking 5.9 percent of its 13F equity portfolio to PASG.
As aggregate interest increased, key money managers were breaking ground themselves. Granite Point Capital, managed by Warren Lammert, initiated the biggest position in Passage Bio, Inc. (NASDAQ:PASG). Granite Point Capital had $1.3 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $0.7 million investment in the stock during the quarter. The only other fund with a brand new PASG position is Renaissance Technologies.
Let's now take a look at hedge fund activity in other stocks similar to Passage Bio, Inc. (NASDAQ:PASG). We will take a look at 3D Systems Corporation (NYSE:DDD), Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), Diebold Nixdorf Incorporated (NYSE:DBD), Hawaiian Holdings, Inc. (NASDAQ:HA), Golar LNG Limited (NASDAQ:GLNG), Seacor Holdings, Inc. (NYSE:CKH), and Republic Bancorp, Inc. KY (NASDAQ:RBCAA). This group of stocks' market caps are similar to PASG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DDD,15,33448,-3 SPPI,13,57477,3 DBD,15,125411,-1 HA,9,29092,-3 GLNG,22,151248,5 CKH,10,86903,2 RBCAA,4,5485,-1 Average,12.6,69866,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $222 million in PASG's case. Golar LNG Limited (NASDAQ:GLNG) is the most popular stock in this table. On the other hand Republic Bancorp, Inc. KY (NASDAQ:RBCAA) is the least popular one with only 4 bullish hedge fund positions. Passage Bio, Inc. (NASDAQ:PASG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PASG is 64. 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. 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 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on PASG as the stock returned 104.7% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.