We can judge whether Curis, Inc. (NASDAQ:CRIS) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Curis, Inc. (NASDAQ:CRIS) has seen an increase in activity from the world's largest hedge funds in recent months. Our calculations also showed that CRIS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_341400" align="aligncenter" width="600"] Samuel Isaly of OrbiMed Advisors[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Keeping this in mind let's check out the key hedge fund action regarding Curis, Inc. (NASDAQ:CRIS).
What does smart money think about Curis, Inc. (NASDAQ:CRIS)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CRIS over the last 17 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, EcoR1 Capital, managed by Oleg Nodelman, holds the biggest position in Curis, Inc. (NASDAQ:CRIS). EcoR1 Capital has a $6.7 million position in the stock, comprising 0.8% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, with a $3.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions contain Samuel Isaly's OrbiMed Advisors, and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Curis, Inc. (NASDAQ:CRIS), around 0.84% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to CRIS.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls' herd. OrbiMed Advisors, managed by Samuel Isaly, initiated the biggest position in Curis, Inc. (NASDAQ:CRIS). OrbiMed Advisors had $2.8 million invested in the company at the end of the quarter.
Let's go over hedge fund activity in other stocks similar to Curis, Inc. (NASDAQ:CRIS). We will take a look at Alpine Immune Sciences, Inc. (NASDAQ:ALPN), Neos Therapeutics Inc (NASDAQ:NEOS), Almaden Minerals Ltd. (NYSE:AAU), and Ark Restaurants Corp. (NASDAQ:ARKR). This group of stocks' market valuations are closest to CRIS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALPN,6,31781,0 NEOS,10,8715,0 AAU,1,1335,-1 ARKR,1,1843,0 Average,4.5,10919,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $13 million in CRIS's case. Neos Therapeutics Inc (NASDAQ:NEOS) is the most popular stock in this table. On the other hand Almaden Minerals Ltd. (NYSE:AAU) is the least popular one with only 1 bullish hedge fund positions. Curis, Inc. (NASDAQ:CRIS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CRIS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CRIS investors were disappointed as the stock returned -19.6% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.