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The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Nektar Therapeutics (NASDAQ:NKTR).
Is Nektar Therapeutics (NASDAQ:NKTR) a healthy stock for your portfolio? Investors who are in the know were taking a bullish view. The number of bullish hedge fund bets rose by 3 in recent months. Nektar Therapeutics (NASDAQ:NKTR) was in 21 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 27. Our calculations also showed that NKTR isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 18 hedge funds in our database with NKTR holdings at the end of March.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Henrik Rhenman of Rhenman & Partners Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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. Now let's analyze the recent hedge fund action surrounding Nektar Therapeutics (NASDAQ:NKTR).
Do Hedge Funds Think NKTR Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NKTR over the last 24 quarters. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, Maverick Capital was the largest shareholder of Nektar Therapeutics (NASDAQ:NKTR), with a stake worth $98.9 million reported as of the end of June. Trailing Maverick Capital was Camber Capital Management, which amassed a stake valued at $60.1 million. Duquesne Capital, Rhenman & Partners Asset Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Camber Capital Management allocated the biggest weight to Nektar Therapeutics (NASDAQ:NKTR), around 2.02% of its 13F portfolio. Rhenman & Partners Asset Management is also relatively very bullish on the stock, dishing out 1.11 percent of its 13F equity portfolio to NKTR.
Now, key money managers were breaking ground themselves. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the most valuable position in Nektar Therapeutics (NASDAQ:NKTR). Tudor Investment Corp had $3.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $1.5 million investment in the stock during the quarter. The other funds with brand new NKTR positions are James Dondero's Highland Capital Management, Michael Gelband's ExodusPoint Capital, and Jinghua Yan's TwinBeech Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Nektar Therapeutics (NASDAQ:NKTR) but similarly valued. We will take a look at MakeMyTrip Limited (NASDAQ:MMYT), United States Cellular Corporation (NYSE:USM), SEMrush Holdings, Inc. (NYSE:SEMR), Marathon Patent Group, Inc. (NASDAQ:MARA), Cannae Holdings, Inc. (NYSE:CNNE), CNO Financial Group Inc (NYSE:CNO), and Integer Holdings Corporation (NYSE:ITGR). This group of stocks' market caps are closest to NKTR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MMYT,9,47845,0 USM,8,91762,-2 SEMR,7,111387,-13 MARA,19,108824,9 CNNE,34,522342,-2 CNO,21,363432,3 ITGR,23,200458,7 Average,17.3,206579,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $207 million. That figure was $234 million in NKTR's case. Cannae Holdings, Inc. (NYSE:CNNE) is the most popular stock in this table. On the other hand SEMrush Holdings, Inc. (NYSE:SEMR) is the least popular one with only 7 bullish hedge fund positions. Nektar Therapeutics (NASDAQ:NKTR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NKTR is 57.3. 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 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately NKTR wasn't nearly as popular as these 5 stocks and hedge funds that were betting on NKTR were disappointed as the stock returned -4.7% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.