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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Cue Biopharma, Inc. (NASDAQ:CUE) based on that data.
Is CUE a good stock to buy now? Cue Biopharma, Inc. (NASDAQ:CUE) investors should be aware of a decrease in activity from the world's largest hedge funds in recent months. Cue Biopharma, Inc. (NASDAQ:CUE) was in 15 hedge funds' portfolios at the end of September. The all time high for this statistic is 18. There were 18 hedge funds in our database with CUE positions at the end of the second quarter. Our calculations also showed that CUE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now we're going to go over the latest hedge fund action surrounding Cue Biopharma, Inc. (NASDAQ:CUE).
Do Hedge Funds Think CUE Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in CUE over the last 21 quarters. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management has the most valuable position in Cue Biopharma, Inc. (NASDAQ:CUE), worth close to $35.3 million, comprising 1.1% of its total 13F portfolio. The second largest stake is held by Behzad Aghazadeh of Avoro Capital Advisors (venBio Select Advisor), with a $28.1 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain David Greenspan's Slate Path Capital, Mark Hart III's Corriente Advisors and Michael Rockefeller and KarláKroeker's Woodline Partners. In terms of the portfolio weights assigned to each position Corriente Advisors allocated the biggest weight to Cue Biopharma, Inc. (NASDAQ:CUE), around 10.97% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, setting aside 5.08 percent of its 13F equity portfolio to CUE.
Because Cue Biopharma, Inc. (NASDAQ:CUE) has faced a decline in interest from the aggregate hedge fund industry, it's easy to see that there were a few funds that slashed their positions entirely heading into Q4. It's worth mentioning that Joseph Edelman's Perceptive Advisors said goodbye to the largest position of the 750 funds monitored by Insider Monkey, worth about $0.6 million in stock, and Parvinder Thiara's Athanor Capital was right behind this move, as the fund said goodbye to about $0.3 million worth. These transactions are important to note, as total hedge fund interest fell by 3 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Cue Biopharma, Inc. (NASDAQ:CUE) but similarly valued. We will take a look at NetSTREIT Corp. (NYSE:NTST), Horizon Bancorp, Inc. (NASDAQ:HBNC), Vectrus Inc (NYSE:VEC), Universal Insurance Holdings, Inc. (NYSE:UVE), RPT Realty (NYSE:RPT), Koppers Holdings Inc. (NYSE:KOP), and G1 Therapeutics, Inc. (NASDAQ:GTHX). All of these stocks' market caps resemble CUE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NTST,10,92763,10 HBNC,12,16845,-2 VEC,17,39968,1 UVE,14,29470,-2 RPT,17,25016,3 KOP,12,15724,1 GTHX,13,30837,2 Average,13.6,35803,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $155 million in CUE's case. Vectrus Inc (NYSE:VEC) is the most popular stock in this table. On the other hand NetSTREIT Corp. (NYSE:NTST) is the least popular one with only 10 bullish hedge fund positions. Cue Biopharma, Inc. (NASDAQ:CUE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CUE is 62.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately CUE wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CUE were disappointed as the stock returned -9.5% since the end of September (through 12/14) 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.