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Is HOOKIPA Pharma Inc. (NASDAQ:HOOK) 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.
HOOKIPA Pharma Inc. (NASDAQ:HOOK) shareholders have witnessed an increase in hedge fund sentiment in recent months. HOOK was in 6 hedge funds' portfolios at the end of September. There were 5 hedge funds in our database with HOOK positions at the end of the previous quarter. Our calculations also showed that HOOK isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
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.
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Israel Englander of Millennium Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Keeping this in mind let's check out the fresh hedge fund action regarding HOOKIPA Pharma Inc. (NASDAQ:HOOK).
How have hedgies been trading HOOKIPA Pharma Inc. (NASDAQ:HOOK)?
Heading into the fourth quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in HOOK a year ago. So, let's find out 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 HOOKIPA Pharma Inc. (NASDAQ:HOOK), with a stake worth $14.2 million reported as of the end of September. Trailing Redmile Group was Hillhouse Capital Management, which amassed a stake valued at $7.1 million. Baker Bros. Advisors, Samsara BioCapital, and Millennium 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 Samsara BioCapital allocated the biggest weight to HOOKIPA Pharma Inc. (NASDAQ:HOOK), around 2.71% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, earmarking 0.48 percent of its 13F equity portfolio to HOOK.
As one would reasonably expect, key money managers were leading the bulls' herd. Springbok Capital, managed by Gavin Saitowitz and Cisco J. del Valle, assembled the biggest position in HOOKIPA Pharma Inc. (NASDAQ:HOOK). Springbok Capital had $0 million invested in the company at the end of the quarter.
Let's now review hedge fund activity in other stocks similar to HOOKIPA Pharma Inc. (NASDAQ:HOOK). We will take a look at Ferroglobe PLC (NASDAQ:GSM), Cue Biopharma, Inc. (NASDAQ:CUE), Roan Resources, Inc. (NYSE:ROAN), and First Northwest Bancorp (NASDAQ:FNWB). This group of stocks' market caps resemble HOOK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GSM,9,24128,-2 CUE,5,21860,4 ROAN,13,58682,-1 FNWB,3,20926,1 Average,7.5,31399,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $34 million in HOOK's case. Roan Resources, Inc. (NYSE:ROAN) is the most popular stock in this table. On the other hand First Northwest Bancorp (NASDAQ:FNWB) is the least popular one with only 3 bullish hedge fund positions. HOOKIPA Pharma Inc. (NASDAQ:HOOK) 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 HOOK as the stock returned 34.8% 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.