The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Compugen Ltd. (NASDAQ:CGEN).
Compugen Ltd. (NASDAQ:CGEN) was in 8 hedge funds' portfolios at the end of the first quarter of 2020. CGEN has seen an increase in hedge fund interest of late. There were 6 hedge funds in our database with CGEN holdings at the end of the previous quarter. Our calculations also showed that CGEN isn't among the 30 most popular stocks among hedge funds (click for Q1 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 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_261250" align="aligncenter" width="400"] Peter Kolchinsky of RA Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a look at the latest hedge fund action surrounding Compugen Ltd. (NASDAQ:CGEN).
Hedge fund activity in Compugen Ltd. (NASDAQ:CGEN)
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CGEN over the last 18 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, RA Capital Management held the most valuable stake in Compugen Ltd. (NASDAQ:CGEN), which was worth $21.5 million at the end of the third quarter. On the second spot was Rock Springs Capital Management which amassed $8 million worth of shares. Citadel Investment Group, DAFNA Capital Management, and Renaissance Technologies 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 DAFNA Capital Management allocated the biggest weight to Compugen Ltd. (NASDAQ:CGEN), around 1.82% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, earmarking 0.68 percent of its 13F equity portfolio to CGEN.
As industrywide interest jumped, key hedge funds were leading the bulls' herd. RA Capital Management, managed by Peter Kolchinsky, created the biggest position in Compugen Ltd. (NASDAQ:CGEN). RA Capital Management had $21.5 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $5.7 million investment in the stock during the quarter. The other funds with brand new CGEN positions are Nathan Fischel's DAFNA Capital Management and Mike Vranos's Ellington.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Compugen Ltd. (NASDAQ:CGEN) but similarly valued. We will take a look at Groupon Inc (NASDAQ:GRPN), IMAX Corporation (NYSE:IMAX), First Defiance Financial (NASDAQ:FDEF), and Oi SA (NYSE:OIBR). This group of stocks' market caps resemble CGEN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GRPN,18,74380,-8 IMAX,17,38681,3 FDEF,10,40954,1 OIBR,8,58613,-4 Average,13.25,53157,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $44 million in CGEN's case. Groupon Inc (NASDAQ:GRPN) is the most popular stock in this table. On the other hand Oi SA (NYSE:OIBR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Compugen Ltd. (NASDAQ:CGEN) is even less popular than OIBR. Hedge funds clearly dropped the ball on CGEN as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on CGEN as the stock returned 109.4% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.