At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). We reversed our stance on March 25th after seeing unprecedented fiscal and monetary stimulus unleashed by the Fed and the Congress. This is the perfect market for stock pickers, now that the stocks are fully valued again. In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards ImmunoGen, Inc. (NASDAQ:IMGN) at the end of the second quarter and determine whether the smart money was really smart about this stock.
ImmunoGen, Inc. (NASDAQ:IMGN) has seen an increase in hedge fund sentiment recently. ImmunoGen, Inc. (NASDAQ:IMGN) was in 20 hedge funds' portfolios at the end of June. The all time high for this statistics is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMGN isn't among the 30 most popular stocks among hedge funds (click for Q2 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.
In the eyes of most investors, hedge funds are perceived as unimportant, old investment vehicles of yesteryear. While there are over 8000 funds with their doors open at the moment, We choose to focus on the leaders of this group, about 850 funds. These hedge fund managers have their hands on bulk of the smart money's total capital, and by tailing their top picks, Insider Monkey has unearthed a few investment strategies that have historically outpaced the S&P 500 index. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Daniel Gold of QVT Financial
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 are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. With all of this in mind we're going to take a gander at the recent hedge fund action encompassing ImmunoGen, Inc. (NASDAQ:IMGN).
How are hedge funds trading ImmunoGen, Inc. (NASDAQ:IMGN)?
Heading into the third quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position 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.
More specifically, Redmile Group was the largest shareholder of ImmunoGen, Inc. (NASDAQ:IMGN), with a stake worth $55.2 million reported as of the end of September. Trailing Redmile Group was Renaissance Technologies, which amassed a stake valued at $44.5 million. Millennium Management, D E Shaw, and QVT Financial 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 Kamunting Street Capital allocated the biggest weight to ImmunoGen, Inc. (NASDAQ:IMGN), around 1.43% of its 13F portfolio. QVT Financial is also relatively very bullish on the stock, earmarking 1.08 percent of its 13F equity portfolio to IMGN.
Now, key money managers were leading the bulls' herd. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, initiated the biggest position in ImmunoGen, Inc. (NASDAQ:IMGN). Healthcor Management LP had $5.5 million invested in the company at the end of the quarter. Chen Tianqiao's Shanda Asset Management also made a $0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones's Tudor Investment Corp and Greg Eisner's Engineers Gate Manager.
Let's now take a look at hedge fund activity in other stocks similar to ImmunoGen, Inc. (NASDAQ:IMGN). We will take a look at Cara Therapeutics Inc (NASDAQ:CARA), Sirius International Insurance Group, Ltd. (NASDAQ:SG), Applied Therapeutics, Inc. (NASDAQ:APLT), RadNet Inc. (NASDAQ:RDNT), Columbus McKinnon Corporation (NASDAQ:CMCO), Tactile Systems Technology, Inc. (NASDAQ:TCMD), and Brookline Bancorp, Inc. (NASDAQ:BRKL). This group of stocks' market valuations resemble IMGN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CARA,18,103957,8 SG,2,1371,0 APLT,14,188219,-2 RDNT,14,56208,-2 CMCO,17,41585,1 TCMD,14,45373,1 BRKL,11,40233,3 Average,12.9,68135,1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.9 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $159 million in IMGN's case. Cara Therapeutics Inc (NASDAQ:CARA) is the most popular stock in this table. On the other hand Sirius International Insurance Group, Ltd. (NASDAQ:SG) is the least popular one with only 2 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 36. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Unfortunately IMGN wasn't nearly as popular as these 10 stocks and hedge funds that were betting on IMGN were disappointed as the stock returned -21.7% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.