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How do we determine whether Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) an attractive investment today? Money managers are in an optimistic mood. The number of bullish hedge fund bets moved up by 1 in recent months. Our calculations also showed that CRNX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). CRNX was in 11 hedge funds' portfolios at the end of the third quarter of 2019. There were 10 hedge funds in our database with CRNX positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are numerous signals stock traders have at their disposal to assess publicly traded companies. A couple of the most underrated signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the best investment managers can beat the broader indices by a healthy amount (see the details here).
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Samuel Isaly of OrbiMed Advisors[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a glance at the new hedge fund action regarding Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX).
How have hedgies been trading Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX)?
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 second quarter of 2019. On the other hand, there were a total of 9 hedge funds with a bullish position in CRNX 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.
According to Insider Monkey's hedge fund database, Albert Cha and Frank Kung's Vivo Capital has the most valuable position in Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX), worth close to $50.8 million, comprising 5.8% of its total 13F portfolio. The second most bullish fund manager is Perceptive Advisors, led by Joseph Edelman, holding a $38.9 million position; 1% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish include Samuel Isaly's OrbiMed Advisors, Peter Kolchinsky's RA Capital Management and James A. Silverman's Opaleye Management. In terms of the portfolio weights assigned to each position Vivo Capital allocated the biggest weight to Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX), around 5.78% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, earmarking 1.68 percent of its 13F equity portfolio to CRNX.
As industrywide interest jumped, specific money managers were leading the bulls' herd. Point72 Asset Management, managed by Steve Cohen, assembled the most outsized position in Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX). Point72 Asset Management had $2 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $0.8 million position during the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) but similarly valued. These stocks are Petmed Express Inc (NASDAQ:PETS), PlayAGS, Inc. (NYSE:AGS), Spirit MTA REIT (NYSE:SMTA), and Majesco (NYSE:MJCO). This group of stocks' market valuations are closest to CRNX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PETS,13,66497,-4 AGS,16,46231,4 SMTA,17,114467,-2 MJCO,2,241,-1 Average,12,56859,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $160 million in CRNX's case. Spirit MTA REIT (NYSE:SMTA) is the most popular stock in this table. On the other hand Majesco (NYSE:MJCO) is the least popular one with only 2 bullish hedge fund positions. Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on CRNX as the stock returned 30.1% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.