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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is ImmunoGen, Inc. (NASDAQ:IMGN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Hedge fund interest in ImmunoGen, Inc. (NASDAQ:IMGN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that IMGN isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as The Bancorp, Inc. (NASDAQ:TBBK), Teekay LNG Partners L.P. (NYSE:TGP), and Energy Recovery, Inc. (NASDAQ:ERII) to gather more data points.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
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. Keeping this in mind we're going to take a look at the latest hedge fund action surrounding ImmunoGen, Inc. (NASDAQ:IMGN).
Do Hedge Funds Think IMGN Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. By comparison, 20 hedge funds held shares or bullish call options in IMGN a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, RA Capital Management held the most valuable stake in ImmunoGen, Inc. (NASDAQ:IMGN), which was worth $121.4 million at the end of the second quarter. On the second spot was OrbiMed Advisors which amassed $85.3 million worth of shares. Redmile Group, Adage Capital Management, and Two Sigma Advisors 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 SilverArc Capital allocated the biggest weight to ImmunoGen, Inc. (NASDAQ:IMGN), around 2.43% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, designating 1.95 percent of its 13F equity portfolio to IMGN.
Due to the fact that ImmunoGen, Inc. (NASDAQ:IMGN) has experienced bearish sentiment from hedge fund managers, logic holds that there is a sect of hedge funds that elected to cut their full holdings last quarter. Intriguingly, Mitchell Blutt's Consonance Capital Management dropped the biggest position of all the hedgies watched by Insider Monkey, valued at about $5.7 million in stock. Allan Teh's fund, Kamunting Street Capital, also dumped its stock, about $1.9 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to ImmunoGen, Inc. (NASDAQ:IMGN). These stocks are The Bancorp, Inc. (NASDAQ:TBBK), Teekay LNG Partners L.P. (NYSE:TGP), Energy Recovery, Inc. (NASDAQ:ERII), TriMas Corp (NASDAQ:TRS), Atara Biotherapeutics Inc (NASDAQ:ATRA), Scholastic Corp (NASDAQ:SCHL), and EVO Payments, Inc. (NASDAQ:EVOP). This group of stocks' market caps match IMGN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TBBK,16,48755,-2 TGP,9,28560,0 ERII,15,115932,-1 TRS,13,94628,2 ATRA,20,458635,0 SCHL,13,47456,4 EVOP,9,48079,-1 Average,13.6,120292,0.3 [/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 $120 million. That figure was $421 million in IMGN's case. Atara Biotherapeutics Inc (NASDAQ:ATRA) is the most popular stock in this table. On the other hand Teekay LNG Partners L.P. (NYSE:TGP) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks ImmunoGen, Inc. (NASDAQ:IMGN) is more popular among hedge funds. Our overall hedge fund sentiment score for IMGN is 85. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Unfortunately IMGN wasn't nearly as popular as these 5 stocks and hedge funds that were betting on IMGN were disappointed as the stock returned -12.1% since the end of the second quarter (through 10/15) 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.