The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Genmab A/S (NASDAQ:GMAB).
Is Genmab A/S (NASDAQ:GMAB) a splendid stock to buy now? Prominent investors are taking a bullish view. The number of long hedge fund positions improved by 10 lately. Our calculations also showed that GMAB isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). GMAB was in 10 hedge funds' portfolios at the end of the third quarter of 2019. There were 0 hedge funds in our database with GMAB holdings at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_337892" align="alignnone" width="2480"] Lei Zhang of Hillhouse Capital Management[/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 look at the recent hedge fund action encompassing Genmab A/S (NASDAQ:GMAB).
What does smart money think about Genmab A/S (NASDAQ:GMAB)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10 from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in GMAB over the last 17 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Hillhouse Capital Management held the most valuable stake in Genmab A/S (NASDAQ:GMAB), which was worth $30.4 million at the end of the third quarter. On the second spot was Redmile Group which amassed $25.3 million worth of shares. Citadel Investment Group, Zimmer Partners, and Healthcor Management 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 Redmile Group allocated the biggest weight to Genmab A/S (NASDAQ:GMAB), around 0.85% of its 13F portfolio. Healthcor Management is also relatively very bullish on the stock, designating 0.53 percent of its 13F equity portfolio to GMAB.
As one would reasonably expect, specific money managers have jumped into Genmab A/S (NASDAQ:GMAB) headfirst. Hillhouse Capital Management, managed by Lei Zhang, created the largest position in Genmab A/S (NASDAQ:GMAB). Hillhouse Capital Management had $30.4 million invested in the company at the end of the quarter. Jeremy Green's Redmile Group also made a $25.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin's Citadel Investment Group, Stuart J. Zimmer's Zimmer Partners, and Arthur B Cohen and Joseph Healey's Healthcor Management.
Let's now take a look at hedge fund activity in other stocks similar to Genmab A/S (NASDAQ:GMAB). We will take a look at International Flavors & Fragrances Inc (NYSE:IFF), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), WellCare Health Plans, Inc. (NYSE:WCG), and Centrais Eletricas Brasileiras SA (NYSE:EBR). This group of stocks' market caps are closest to GMAB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IFF,19,202887,1 SSNC,45,1483434,4 WCG,41,1791970,-5 EBR,5,21001,-1 Average,27.5,874823,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $875 million. That figure was $136 million in GMAB's case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Centrais Eletricas Brasileiras SA (NYSE:EBR) is the least popular one with only 5 bullish hedge fund positions. Genmab A/S (NASDAQ:GMAB) 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 GMAB as the stock returned 15.5% 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.