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In this article we are going to use hedge fund sentiment as a tool and determine whether Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is CRBP a good stock to buy? Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) was in 5 hedge funds' portfolios at the end of March. The all time high for this statistic is 14. CRBP investors should be aware of a decrease in support from the world's most elite money managers lately. There were 10 hedge funds in our database with CRBP positions at the end of the fourth quarter. Our calculations also showed that CRBP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
David Siegel of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. 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. Keeping this in mind let's check out the fresh hedge fund action regarding Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP).
Do Hedge Funds Think CRBP Is A Good Stock To Buy Now?
At first quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -50% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in CRBP over the last 23 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) was held by Ikarian Capital, which reported holding $1.9 million worth of stock at the end of December. It was followed by D E Shaw with a $1.1 million position. Other investors bullish on the company included Citadel Investment Group, Two Sigma Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Ikarian Capital allocated the biggest weight to Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), around 0.06% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, setting aside 0.0015 percent of its 13F equity portfolio to CRBP.
Seeing as Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) has witnessed a decline in interest from the entirety of the hedge funds we track, logic holds that there lies a certain "tier" of money managers that elected to cut their entire stakes in the first quarter. At the top of the heap, Fred Knoll's Knoll Capital Management said goodbye to the biggest position of the 750 funds tracked by Insider Monkey, comprising close to $6.3 million in stock. Renaissance Technologies, also cut its stock, about $1.2 million worth. These moves are interesting, as total hedge fund interest dropped by 5 funds in the first quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) but similarly valued. These stocks are Braemar Hotels & Resorts Inc. (NYSE:BHR), MediciNova, Inc. (NASDAQ:MNOV), Flexsteel Industries, Inc. (NASDAQ:FLXS), Bel Fuse, Inc. (NASDAQ:BELFB), EDAP TMS S.A. (NASDAQ:EDAP), Glory Star New Media Group Holdings Limited (NASDAQ:GSMG), and Exfo Inc (NASDAQ:EXFO). All of these stocks' market caps resemble CRBP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BHR,17,25551,1 MNOV,4,1162,0 FLXS,10,60969,-1 BELFB,8,21978,1 EDAP,8,26076,2 GSMG,8,1218,-1 EXFO,3,6744,2 Average,8.3,20528,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.3 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $4 million in CRBP's case. Braemar Hotels & Resorts Inc. (NYSE:BHR) is the most popular stock in this table. On the other hand Exfo Inc (NASDAQ:EXFO) is the least popular one with only 3 bullish hedge fund positions. Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CRBP is 17.9. 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 negative signal and 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately CRBP wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CRBP investors were disappointed as the stock returned 1% since the end of March (through 6/18) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.