Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Vir Biotechnology, Inc. (NASDAQ:VIR).
Vir Biotechnology, Inc. (NASDAQ:VIR) has seen an increase in enthusiasm from smart money in recent months. VIR was in 4 hedge funds' portfolios at the end of March. There were 2 hedge funds in our database with VIR positions at the end of the previous quarter. Our calculations also showed that VIR isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_728973" align="aligncenter" width="399"] Oleg Nodelman of EcoR1 Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to go over the key hedge fund action encompassing Vir Biotechnology, Inc. (NASDAQ:VIR).
What have hedge funds been doing with Vir Biotechnology, Inc. (NASDAQ:VIR)?
At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the previous quarter. The graph below displays the number of hedge funds with bullish position in VIR over the last 18 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Oleg Nodelman's EcoR1 Capital has the number one position in Vir Biotechnology, Inc. (NASDAQ:VIR), worth close to $9.3 million, accounting for 1% of its total 13F portfolio. On EcoR1 Capital's heels is Dmitry Balyasny of Balyasny Asset Management, with a $3.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism contain David Kowitz and Sheldon Kasowitz's Indus Capital, Renaissance Technologies and . In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Vir Biotechnology, Inc. (NASDAQ:VIR), around 0.97% of its 13F portfolio. Indus Capital is also relatively very bullish on the stock, setting aside 0.51 percent of its 13F equity portfolio to VIR.
As one would reasonably expect, key money managers were breaking ground themselves. EcoR1 Capital, managed by Oleg Nodelman, created the most outsized position in Vir Biotechnology, Inc. (NASDAQ:VIR). EcoR1 Capital had $9.3 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also initiated a $3.2 million position during the quarter. The only other fund with a brand new VIR position is Renaissance Technologies.
Let's go over hedge fund activity in other stocks similar to Vir Biotechnology, Inc. (NASDAQ:VIR). These stocks are Jabil Inc. (NYSE:JBL), Ritchie Bros. Auctioneers Incorporated (NYSE:RBA), GrubHub Inc (NYSE:GRUB), and Clearway Energy, Inc. (NYSE:CWEN). All of these stocks' market caps are similar to VIR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JBL,20,252649,-14 RBA,14,178380,-7 GRUB,32,373032,-1 CWEN,17,169906,-6 Average,20.75,243492,-7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $243 million. That figure was $17 million in VIR's case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand Ritchie Bros. Auctioneers Incorporated (NYSE:RBA) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Vir Biotechnology, Inc. (NASDAQ:VIR) is even less popular than RBA. Hedge funds dodged a bullet by taking a bearish stance towards VIR. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately VIR wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); VIR investors were disappointed as the stock returned -0.3% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.