Should You Buy Voyager Therapeutics, Inc. (VYGR)?

Reymerlyn Martin
Updated

Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.

Is Voyager Therapeutics, Inc. (NASDAQ:VYGR) a buy, sell, or hold? The best stock pickers are becoming hopeful. The number of long hedge fund bets went up by 4 recently. Our calculations also showed that VYGR isn't among the 30 most popular stocks among hedge funds. VYGR was in 21 hedge funds' portfolios at the end of the third quarter of 2018. There were 17 hedge funds in our database with VYGR holdings at the end of the previous quarter.

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 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 market by 18 percentage points since May 2014 through December 3, 2018 (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.

Thomas-Steyer-e1351513531594
Thomas-Steyer-e1351513531594

Let's go over the recent hedge fund action regarding Voyager Therapeutics, Inc. (NASDAQ:VYGR).

How are hedge funds trading Voyager Therapeutics, Inc. (NASDAQ:VYGR)?

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 24% from the previous quarter. The graph below displays the number of hedge funds with bullish position in VYGR over the last 13 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

VYGR_dec2018
VYGR_dec2018

Among these funds, Armistice Capital held the most valuable stake in Voyager Therapeutics, Inc. (NASDAQ:VYGR), which was worth $32.6 million at the end of the third quarter. On the second spot was Great Point Partners which amassed $26.5 million worth of shares. Moreover, Casdin Capital, Highline Capital Management, and Farallon Capital were also bullish on Voyager Therapeutics, Inc. (NASDAQ:VYGR), allocating a large percentage of their portfolios to this stock.

Now, key money managers have jumped into Voyager Therapeutics, Inc. (NASDAQ:VYGR) headfirst. Point72 Asset Management, managed by Steve Cohen, established the most outsized position in Voyager Therapeutics, Inc. (NASDAQ:VYGR). Point72 Asset Management had $1.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $1.1 million investment in the stock during the quarter. The following funds were also among the new VYGR investors: Ken Griffin's Citadel Investment Group, Ken Griffin's Citadel Investment Group, and Noam Gottesman's GLG Partners.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Voyager Therapeutics, Inc. (NASDAQ:VYGR) but similarly valued. We will take a look at Amalgamated Bank (NASDAQ:AMAL), Oasis Midstream Partners LP (NYSE:OMP), Sprague Resources LP (NYSE:SRLP), and Abeona Therapeutics Inc (NASDAQ:ABEO). This group of stocks' market values match VYGR's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMAL,9,42399,9 OMP,2,14246,1 SRLP,1,361,0 ABEO,22,141821,2 Average,8.5,49707,3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $145 million in VYGR's case. Abeona Therapeutics Inc (NASDAQ:ABEO) is the most popular stock in this table. On the other hand Sprague Resources LP (NYSE:SRLP) is the least popular one with only 1 bullish hedge fund positions. Voyager Therapeutics, Inc. (NASDAQ:VYGR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. In this regard ABEO might be a better candidate to consider a long position.

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

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