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Hedge Funds Are Cashing Out Of MacroGenics Inc (MGNX)

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  • MGNX
  • ^GSPC

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards MacroGenics Inc (NASDAQ:MGNX).

MacroGenics Inc (NASDAQ:MGNX) was in 24 hedge funds' portfolios at the end of June. The all time high for this statistic is 30. MGNX has seen a decrease in activity from the world's largest hedge funds lately. There were 30 hedge funds in our database with MGNX positions at the end of the first quarter. Our calculations also showed that MGNX isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

To most market participants, hedge funds are perceived as unimportant, outdated financial tools of yesteryear. While there are over 8000 funds in operation today, Our experts choose to focus on the masters of this group, approximately 850 funds. These money managers manage the majority of all hedge funds' total capital, and by observing their inimitable investments, Insider Monkey has spotted many investment strategies that have historically outperformed the broader indices. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Peter Kolchinsky of RA Capital 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. With all of this in mind we're going to view the latest hedge fund action encompassing MacroGenics Inc (NASDAQ:MGNX).

Do Hedge Funds Think MGNX Is A Good Stock To Buy Now?

At Q2's end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MGNX over the last 24 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, RA Capital Management was the largest shareholder of MacroGenics Inc (NASDAQ:MGNX), with a stake worth $159.6 million reported as of the end of June. Trailing RA Capital Management was Perceptive Advisors, which amassed a stake valued at $57.7 million. Holocene Advisors, Great Point Partners, and Citadel Investment Group 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 Great Point Partners allocated the biggest weight to MacroGenics Inc (NASDAQ:MGNX), around 7.77% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, designating 3.64 percent of its 13F equity portfolio to MGNX.

Because MacroGenics Inc (NASDAQ:MGNX) has faced declining sentiment from hedge fund managers, logic holds that there is a sect of hedgies that slashed their entire stakes last quarter. At the top of the heap, Mitchell Blutt's Consonance Capital Management dropped the biggest stake of all the hedgies watched by Insider Monkey, comprising an estimated $78.7 million in stock. Phill Gross and Robert Atchinson's fund, Adage Capital Management, also dumped its stock, about $11.8 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 6 funds last quarter.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as MacroGenics Inc (NASDAQ:MGNX) but similarly valued. We will take a look at Sixth Street Specialty Lending Inc (NYSE:TSLX), Northwest Natural Holding Company (NYSE:NWN), Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY), AppHarvest, Inc. (NASDAQ:APPH), Zymeworks Inc. (NYSE:ZYME), Enerpac Tool Group Corp. (NYSE:EPAC), and Pulmonx Corporation (NASDAQ:LUNG). This group of stocks' market caps are similar to MGNX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TSLX,10,93984,1 NWN,11,14194,1 HRMY,15,173932,5 APPH,15,273043,-6 ZYME,19,459937,-8 EPAC,7,117733,0 LUNG,20,264933,-7 Average,13.9,199679,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $200 million. That figure was $438 million in MGNX's case. Pulmonx Corporation (NASDAQ:LUNG) is the most popular stock in this table. On the other hand Enerpac Tool Group Corp. (NYSE:EPAC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks MacroGenics Inc (NASDAQ:MGNX) is more popular among hedge funds. Our overall hedge fund sentiment score for MGNX is 73. 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. 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 still beat the market by 1.6 percentage points. Unfortunately MGNX wasn't nearly as popular as these 5 stocks and hedge funds that were betting on MGNX were disappointed as the stock returned -28.9% since the end of the second quarter (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 most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.