Did Hedge Funds Drop The Ball On Casa Therapeutics Inc (CARA) ?

At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of December 31. In this article, we will use that wealth of knowledge to determine whether or not Casa Therapeutics Inc (NASDAQ:CARA) makes for a good investment right now.

Casa Therapeutics Inc (NASDAQ:CARA) was in 9 hedge funds' portfolios at the end of the fourth quarter of 2018. CARA shareholders have witnessed a decrease in hedge fund sentiment in recent months. There were 11 hedge funds in our database with CARA positions at the end of the previous quarter. Our calculations also showed that cara isn't among the 30 most popular stocks among hedge funds.

According to most investors, hedge funds are seen as unimportant, outdated investment tools of the past. While there are over 8000 funds trading at the moment, We look at the elite of this group, around 750 funds. These investment experts preside over the lion's share of all hedge funds' total asset base, and by tailing their highest performing picks, Insider Monkey has figured out numerous investment strategies that have historically outstripped the S&P 500 index. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by nearly 5 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.

Let's view the new hedge fund action regarding Casa Therapeutics Inc (NASDAQ:CARA).

How are hedge funds trading Casa Therapeutics Inc (NASDAQ:CARA)?

At the end of the fourth quarter, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. On the other hand, there were a total of 5 hedge funds with a bullish position in CARA a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in Casa Therapeutics Inc (NASDAQ:CARA), which was worth $5.4 million at the end of the fourth quarter. On the second spot was Marshall Wace LLP which amassed $4.3 million worth of shares. Moreover, Millennium Management, DAFNA Capital Management, and Citadel Investment Group were also bullish on Casa Therapeutics Inc (NASDAQ:CARA), allocating a large percentage of their portfolios to this stock.

Seeing as Casa Therapeutics Inc (NASDAQ:CARA) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of hedgies that elected to cut their entire stakes in the third quarter. It's worth mentioning that Ori Hershkovitz's Nexthera Capital dumped the largest investment of the 700 funds monitored by Insider Monkey, totaling an estimated $17.7 million in stock, and James A. Silverman's Opaleye Management was right behind this move, as the fund said goodbye to about $3.1 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 2 funds in the third quarter.