Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Precigen, Inc. (NYSE:PGEN) based on that data and determine whether they were really smart about the stock.
Is Precigen, Inc. (NYSE:PGEN) a good investment now? The best stock pickers were in an optimistic mood. The number of long hedge fund bets increased by 3 recently. Our calculations also showed that PGEN 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). PGEN was in 13 hedge funds' portfolios at the end of the first quarter of 2020. There were 10 hedge funds in our database with PGEN holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
[caption id="attachment_88925" align="aligncenter" width="400"] Bill Miller of Miller Value Partners[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the 10 most profitable companies in the world to identify emerging companies that are likely to deliver 1000% gains in the coming years. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's go over the fresh hedge fund action encompassing Precigen, Inc. (NYSE:PGEN).
How have hedgies been trading Precigen, Inc. (NYSE:PGEN)?
At the end of the first quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the fourth quarter of 2019. By comparison, 8 hedge funds held shares or bullish call options in PGEN a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Miller Value Partners, managed by Bill Miller, holds the biggest position in Precigen, Inc. (NYSE:PGEN). Miller Value Partners has a $25.3 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $3.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish contain Thomas E. Claugus's GMT Capital, Marc Lisker, Glenn Fuhrman and John Phelan's MSDC Management and David Cohen and Harold Levy's Iridian Asset Management. In terms of the portfolio weights assigned to each position Miller Value Partners allocated the biggest weight to Precigen, Inc. (NYSE:PGEN), around 1.63% of its 13F portfolio. MSDC Management is also relatively very bullish on the stock, setting aside 0.56 percent of its 13F equity portfolio to PGEN.
Consequently, key money managers were leading the bulls' herd. Miller Value Partners, managed by Bill Miller, assembled the largest position in Precigen, Inc. (NYSE:PGEN). Miller Value Partners had $25.3 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $3.4 million investment in the stock during the quarter. The other funds with brand new PGEN positions are Thomas E. Claugus's GMT Capital, Marc Lisker, Glenn Fuhrman and John Phelan's MSDC Management, and David Cohen and Harold Levy's Iridian Asset Management.
Let's go over hedge fund activity in other stocks similar to Precigen, Inc. (NYSE:PGEN). We will take a look at Ladder Capital Corp (NYSE:LADR), Collier Creek Holdings (NYSE:CCH), Nicolet Bankshares Inc. (NASDAQ:NCBS), and Abercrombie & Fitch Co. (NYSE:ANF). This group of stocks' market values resemble PGEN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LADR,17,27489,6 CCH,14,125059,-2 NCBS,5,5413,0 ANF,23,163425,-3 Average,14.75,80347,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $36 million in PGEN's case. Abercrombie & Fitch Co. (NYSE:ANF) is the most popular stock in this table. On the other hand Nicolet Bankshares Inc. (NASDAQ:NCBS) is the least popular one with only 5 bullish hedge fund positions. Precigen, Inc. (NYSE:PGEN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on PGEN as the stock returned 44.7% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.