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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Vir Biotechnology, Inc. (NASDAQ:VIR).
Is Vir Biotechnology (VIR) a good stock to buy now? VIR shareholders have witnessed a decrease in support from the world's most elite money managers lately. Vir Biotechnology, Inc. (NASDAQ:VIR) was in 6 hedge funds' portfolios at the end of September. The all time high for this statistics is 7. Our calculations also showed that VIR 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Charles Clough of Clough Capital Partners
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. Now let's view the new hedge fund action encompassing Vir Biotechnology, Inc. (NASDAQ:VIR).
How have hedgies been trading Vir Biotechnology, Inc. (NASDAQ:VIR)?
Heading into the fourth quarter of 2020, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards VIR over the last 21 quarters. So, let's review 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, Charles Clough's Clough Capital Partners has the largest position in Vir Biotechnology, Inc. (NASDAQ:VIR), worth close to $6.9 million, corresponding to 0.5% of its total 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $2.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism contain Ken Griffin's Citadel Investment Group, David Harding's Winton Capital Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Clough Capital Partners allocated the biggest weight to Vir Biotechnology, Inc. (NASDAQ:VIR), around 0.49% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, dishing out 0.06 percent of its 13F equity portfolio to VIR.
Due to the fact that Vir Biotechnology, Inc. (NASDAQ:VIR) has faced a decline in interest from the smart money, it's safe to say that there is a sect of fund managers that decided to sell off their full holdings heading into Q4. It's worth mentioning that Manfred Yu's Acuta Capital Partners sold off the biggest position of all the hedgies followed by Insider Monkey, worth an estimated $5.2 million in stock. Noam Gottesman's fund, GLG Partners, also dropped its stock, about $1.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Vir Biotechnology, Inc. (NASDAQ:VIR) but similarly valued. These stocks are Plains All American Pipeline, L.P. (NYSE:PAA), Everbridge, Inc. (NASDAQ:EVBG), Advanced Drainage Systems Inc. (NYSE:WMS), Mercury Systems Inc (NASDAQ:MRCY), Tapestry, Inc. (NYSE:TPR), Navistar International Corp (NYSE:NAV), and Littelfuse, Inc. (NASDAQ:LFUS). This group of stocks' market values are similar to VIR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PAA,8,38690,-1 EVBG,30,980449,-13 WMS,25,713522,1 MRCY,19,58220,-7 TPR,39,670797,0 NAV,43,2102650,10 LFUS,22,352091,-2 Average,26.6,702346,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $702 million. That figure was $15 million in VIR's case. Navistar International Corp (NYSE:NAV) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NYSE:PAA) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Vir Biotechnology, Inc. (NASDAQ:VIR) is even less popular than PAA. Our overall hedge fund sentiment score for VIR is 29.7. 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. Hedge funds dodged a bullet by taking a bearish stance towards VIR. Our calculations showed that the top 20 most popular hedge fund stocks 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 November 27th but managed to beat the market again by 16.1 percentage points. Unfortunately VIR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); VIR investors were disappointed as the stock returned -13.7% since the end of the third quarter (through 11/27) 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 most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.