Is Aclaris Therapeutics, Inc. (ACRS) Going to Burn These Hedge Funds?

·5 min read

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Aclaris Therapeutics, Inc. (NASDAQ:ACRS).

Aclaris Therapeutics, Inc. (NASDAQ:ACRS) shareholders have witnessed a decrease in activity from the world's largest hedge funds lately. Aclaris Therapeutics, Inc. (NASDAQ:ACRS) was in 36 hedge funds' portfolios at the end of September. The all time high for this statistic is 37. Our calculations also showed that ACRS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Jim Tananbaum - Foresite Capital
Jim Tananbaum - Foresite Capital

Jim Tananbaum of Foresite Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let's analyze the latest hedge fund action surrounding Aclaris Therapeutics, Inc. (NASDAQ:ACRS).

Do Hedge Funds Think ACRS Is A Good Stock To Buy Now?

At the end of September, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards ACRS over the last 25 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is ACRS A Good Stock To Buy?
Is ACRS A Good Stock To Buy?

More specifically, Rock Springs Capital Management was the largest shareholder of Aclaris Therapeutics, Inc. (NASDAQ:ACRS), with a stake worth $68.5 million reported as of the end of September. Trailing Rock Springs Capital Management was Commodore Capital, which amassed a stake valued at $39.4 million. Renaissance Technologies, Holocene Advisors, and Foresite 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 Foresite Capital allocated the biggest weight to Aclaris Therapeutics, Inc. (NASDAQ:ACRS), around 48.8% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, setting aside 10.39 percent of its 13F equity portfolio to ACRS.

Seeing as Aclaris Therapeutics, Inc. (NASDAQ:ACRS) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain "tier" of hedgies that elected to cut their full holdings by the end of the third quarter. It's worth mentioning that Arsani William's Logos Capital cut the biggest investment of all the hedgies tracked by Insider Monkey, comprising about $11.9 million in stock. Matthew L Pinz's fund, Pinz Capital, also dropped its stock, about $2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Aclaris Therapeutics, Inc. (NASDAQ:ACRS) but similarly valued. We will take a look at Anterix Inc. (NASDAQ:ATEX), Uxin Limited (NASDAQ:UXIN), Matthews International Corp (NASDAQ:MATW), DHT Holdings Inc (NYSE:DHT), Yalla Group Limited (NYSE:YALA), Meridian Bancorp, Inc. (NASDAQ:EBSB), and Schweitzer-Mauduit International, Inc. (NYSE:SWM). This group of stocks' market caps are closest to ACRS's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATEX,16,473412,-2 UXIN,8,25744,0 MATW,14,69746,-2 DHT,15,110503,-5 YALA,4,3656,-2 EBSB,15,125273,-1 SWM,8,8563,1 Average,11.4,116700,-1.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $470 million in ACRS's case. Anterix Inc. (NASDAQ:ATEX) is the most popular stock in this table. On the other hand Yalla Group Limited (NYSE:YALA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Aclaris Therapeutics, Inc. (NASDAQ:ACRS) is more popular among hedge funds. Our overall hedge fund sentiment score for ACRS is 83.2. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately ACRS wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ACRS were disappointed as the stock returned -28.9% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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