Were Hedge Funds Right About Atreca, Inc. (BCEL)?

·6 min read

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. 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 Atreca, Inc. (NASDAQ:BCEL).

Is Atreca, Inc. (NASDAQ:BCEL) a buy here? The best stock pickers were taking a bullish view. The number of long hedge fund bets went up by 2 recently. Atreca, Inc. (NASDAQ:BCEL) was in 17 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BCEL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Oleg Nodelman EcoR1 Capital
Oleg Nodelman EcoR1 Capital

Oleg Nodelman of EcoR1 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. With all of this in mind we're going to take a gander at the recent hedge fund action regarding Atreca, Inc. (NASDAQ:BCEL).

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

At first quarter's end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in BCEL a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Baker Bros. Advisors was the largest shareholder of Atreca, Inc. (NASDAQ:BCEL), with a stake worth $54.2 million reported as of the end of March. Trailing Baker Bros. Advisors was Redmile Group, which amassed a stake valued at $38.2 million. EcoR1 Capital, Rock Springs Capital Management, and Samsara BioCapital 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 Copernicus Capital Management allocated the biggest weight to Atreca, Inc. (NASDAQ:BCEL), around 4.46% of its 13F portfolio. EcoR1 Capital is also relatively very bullish on the stock, designating 1.65 percent of its 13F equity portfolio to BCEL.

As industrywide interest jumped, some big names were leading the bulls' herd. Millennium Management, managed by Israel Englander, established the most valuable call position in Atreca, Inc. (NASDAQ:BCEL). Millennium Management had $1.2 million invested in the company at the end of the quarter. Peter Muller's PDT Partners also made a $0.6 million investment in the stock during the quarter. The other funds with brand new BCEL positions are John W. Rende's Copernicus Capital Management, John Overdeck and David Siegel's Two Sigma Advisors, and Ken Griffin's Citadel Investment Group.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Atreca, Inc. (NASDAQ:BCEL) but similarly valued. These stocks are OncoCyte Corporation (NASDAQ:OCX), Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA), City Office REIT Inc (NYSE:CIO), Syros Pharmaceuticals, Inc. (NASDAQ:SYRS), Nesco Holdings, Inc. (NYSE:NSCO), Accuray Incorporated (NASDAQ:ARAY), and XOMA Corp (NASDAQ:XOMA). This group of stocks' market valuations match BCEL's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OCX,14,182958,8 LTRPA,21,126921,3 CIO,11,29144,-3 SYRS,18,119867,-2 NSCO,10,32769,-3 ARAY,17,90188,0 XOMA,5,169665,-5 Average,13.7,107359,-0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $164 million in BCEL's case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand XOMA Corp (NASDAQ:XOMA) is the least popular one with only 5 bullish hedge fund positions. Atreca, Inc. (NASDAQ:BCEL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BCEL is 74.5. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately BCEL wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BCEL were disappointed as the stock returned -53.9% since the end of March (through 7/23) 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 many 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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