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Is Affimed NV (NASDAQ:AFMD) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Affimed NV (NASDAQ:AFMD) shareholders have witnessed an increase in hedge fund sentiment in recent months. Affimed NV (NASDAQ:AFMD) was in 25 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AFMD isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
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 review the latest hedge fund action surrounding Affimed NV (NASDAQ:AFMD).
Do Hedge Funds Think AFMD Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. On the other hand, there were a total of 14 hedge funds with a bullish position in AFMD a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Point72 Asset Management, managed by Steve Cohen, holds the largest position in Affimed NV (NASDAQ:AFMD). Point72 Asset Management has a $45.4 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is 683 Capital Partners, led by Ari Zweiman, holding a $44.8 million position; 1.5% of its 13F portfolio is allocated to the stock. Some other peers that are bullish encompass Ken Griffin's Citadel Investment Group, Mitchell Blutt's Consonance Capital Management and Arthur B Cohen and Joseph Healey's Healthcor Management LP. In terms of the portfolio weights assigned to each position Stonepine Capital allocated the biggest weight to Affimed NV (NASDAQ:AFMD), around 3.78% of its 13F portfolio. Consonance Capital Management is also relatively very bullish on the stock, earmarking 3.25 percent of its 13F equity portfolio to AFMD.
As industrywide interest jumped, specific money managers have been driving this bullishness. Bailard Inc, managed by Thomas Bailard, assembled the largest position in Affimed NV (NASDAQ:AFMD). Bailard Inc had $1 million invested in the company at the end of the quarter. Neil Shahrestani's Ikarian Capital also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Jerome Pfund and Michael Sjostrom's Sectoral Asset Management, Michael Gelband's ExodusPoint Capital, and Karim Abbadi and Edward McBride's Centiva Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Affimed NV (NASDAQ:AFMD) but similarly valued. We will take a look at Quotient Technology Inc (NYSE:QUOT), First Foundation Inc (NASDAQ:FFWM), Celestica Inc. (NYSE:CLS), Apartment Investment and Management Co. (NYSE:AIV), Diebold Nixdorf Incorporated (NYSE:DBD), Score Media and Gaming Inc. (NASDAQ:SCR), and Bioventus Inc. (NASDAQ:BVS). This group of stocks' market caps are similar to AFMD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position QUOT,24,465804,-1 FFWM,18,54375,2 CLS,14,123207,1 AIV,15,147295,-3 DBD,17,180799,-2 SCR,8,16744,-4 BVS,11,88501,-1 Average,15.3,153818,-1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $241 million in AFMD's case. Quotient Technology Inc (NYSE:QUOT) is the most popular stock in this table. On the other hand Score Media and Gaming Inc. (NASDAQ:SCR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Affimed NV (NASDAQ:AFMD) is more popular among hedge funds. Our overall hedge fund sentiment score for AFMD is 87. 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 AFMD wasn't nearly as popular as these 5 stocks and hedge funds that were betting on AFMD were disappointed as the stock returned -29.5% 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.