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 817 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 September 30th, about a month before the elections. In this article we look at what those investors think of Poseida Therapeutics, Inc. (NASDAQ:PSTX).
Is PSTX a good stock to buy now? Investors who are in the know were becoming hopeful. The number of bullish hedge fund bets inched up by 12 lately. Poseida Therapeutics, Inc. (NASDAQ:PSTX) was in 12 hedge funds' portfolios at the end of the third quarter of 2020. Our calculations also showed that PSTX 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.
Matthew Halbower Pentwater Capital
Matthew Halbower of Pentwater Capital
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 glance at the key hedge fund action encompassing Poseida Therapeutics, Inc. (NASDAQ:PSTX).
Do Hedge Funds Think PSTX Is A Good Stock To Buy Now?
At third quarter's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12 from the second quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in PSTX a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pentwater Capital Management held the most valuable stake in Poseida Therapeutics, Inc. (NASDAQ:PSTX), which was worth $21.4 million at the end of the third quarter. On the second spot was Adage Capital Management which amassed $12 million worth of shares. Sectoral Asset Management, Vivo Capital, and Perceptive Advisors 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 Sectoral Asset Management allocated the biggest weight to Poseida Therapeutics, Inc. (NASDAQ:PSTX), around 0.8% of its 13F portfolio. Vivo Capital is also relatively very bullish on the stock, earmarking 0.47 percent of its 13F equity portfolio to PSTX.
As one would reasonably expect, some big names were leading the bulls' herd. Pentwater Capital Management, managed by Matthew Halbower, assembled the largest position in Poseida Therapeutics, Inc. (NASDAQ:PSTX). Pentwater Capital Management had $21.4 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson's Adage Capital Management also made a $12 million investment in the stock during the quarter. The other funds with brand new PSTX positions are Jerome Pfund and Michael Sjostrom's Sectoral Asset Management, Albert Cha and Frank Kung's Vivo Capital, and Joseph Edelman's Perceptive Advisors.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Poseida Therapeutics, Inc. (NASDAQ:PSTX) but similarly valued. These stocks are trivago N.V. (NASDAQ:TRVG), ACCO Brands Corporation (NYSE:ACCO), Summit Hotel Properties Inc (NYSE:INN), Aerie Pharmaceuticals Inc (NASDAQ:AERI), Golden Ocean Group Ltd (NASDAQ:GOGL), CIRCOR International, Inc. (NYSE:CIR), and Humanigen, Inc. (NASDAQ:HGEN). All of these stocks' market caps are closest to PSTX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRVG,8,48998,1 ACCO,14,25385,2 INN,9,8195,1 AERI,15,96347,-8 GOGL,5,65516,-2 CIR,9,101099,0 HGEN,6,109577,6 Average,9.4,65017,0 [/table]
As you can see these stocks had an average of 9.4 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $70 million in PSTX's case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand Golden Ocean Group Ltd (NASDAQ:GOGL) is the least popular one with only 5 bullish hedge fund positions. Poseida Therapeutics, Inc. (NASDAQ:PSTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PSTX is 66. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on PSTX as the stock returned 20.6% since the end of Q3 (through 12/8) 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.
