We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of Jounce Therapeutics, Inc. (NASDAQ:JNCE) based on that data.
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 market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's go over the new hedge fund action encompassing Jounce Therapeutics, Inc. (NASDAQ:JNCE).
How have hedgies been trading Jounce Therapeutics, Inc. (NASDAQ:JNCE)?
At Q3's end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. The graph below displays the number of hedge funds with bullish position in JNCE over the last 13 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Jounce Therapeutics, Inc. (NASDAQ:JNCE), which was worth $4.2 million at the end of the third quarter. On the second spot was EcoR1 Capital which amassed $3.2 million worth of shares. Moreover, Redmile Group, Casdin Capital, and Citadel Investment Group were also bullish on Jounce Therapeutics, Inc. (NASDAQ:JNCE), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, key money managers have jumped into Jounce Therapeutics, Inc. (NASDAQ:JNCE) headfirst. EcoR1 Capital, managed by Oleg Nodelman, initiated the largest call position in Jounce Therapeutics, Inc. (NASDAQ:JNCE). EcoR1 Capital had $3.2 million invested in the company at the end of the quarter. Noam Gottesman's GLG Partners also initiated a $1.3 million position during the quarter. The other funds with brand new JNCE positions are Jim Simons's Renaissance Technologies, D. E. Shaw's D E Shaw, and Michael Platt and William Reeves's BlueCrest Capital Mgmt..
Let's now take a look at hedge fund activity in other stocks similar to Jounce Therapeutics, Inc. (NASDAQ:JNCE). These stocks are RGC Resources, Inc. (NASDAQ:RGCO), Approach Resources Inc. (NASDAQ:AREX), Eaton Vance Municipal Income 2028 Term Trust (NYSE:ETX), and Teligent, Inc. (NASDAQ:TLGT). All of these stocks' market caps resemble JNCE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RGCO,1,296,1 AREX,4,307,0 ETX,1,152,1 TLGT,7,57858,1 Average,3.25,14653,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $15 million in JNCE's case. Teligent, Inc. (NASDAQ:TLGT) is the most popular stock in this table. On the other hand RGC Resources, Inc. (NASDAQ:RGCO) and Eaton Vance Municipal Income 2028 Term Trust (NYSE:ETX) are the least popular ones with only 1 bullish hedge fund positions each. Compared to these stocks Jounce Therapeutics, Inc. (NASDAQ:JNCE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.