In this article we will check out the progression of hedge fund sentiment towards ImmunoGen, Inc. (NASDAQ:IMGN) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
ImmunoGen, Inc. (NASDAQ:IMGN) has experienced an increase in activity from the world's largest hedge funds in recent months. IMGN was in 19 hedge funds' portfolios at the end of March. There were 18 hedge funds in our database with IMGN holdings at the end of the previous quarter. Our calculations also showed that IMGN 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="393"] Peter Kolchinsky of RA 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. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's take a gander at the recent hedge fund action regarding ImmunoGen, Inc. (NASDAQ:IMGN).
What have hedge funds been doing with ImmunoGen, Inc. (NASDAQ:IMGN)?
At Q1's end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IMGN over the last 18 quarters. With the smart money's capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Redmile Group, managed by Jeremy Green, holds the biggest position in ImmunoGen, Inc. (NASDAQ:IMGN). Redmile Group has a $57.1 million position in the stock, comprising 1.6% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, which holds a $37.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Peter Kolchinsky's RA Capital Management, D. E. Shaw's D E Shaw and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Redmile Group allocated the biggest weight to ImmunoGen, Inc. (NASDAQ:IMGN), around 1.6% of its 13F portfolio. QVT Financial is also relatively very bullish on the stock, designating 1.09 percent of its 13F equity portfolio to IMGN.
As aggregate interest increased, specific money managers were breaking ground themselves. RA Capital Management, managed by Peter Kolchinsky, assembled the biggest position in ImmunoGen, Inc. (NASDAQ:IMGN). RA Capital Management had $17.6 million invested in the company at the end of the quarter. Behzad Aghazadeh's Avoro Capital Advisors (venBio Select Advisor) also made a $6.5 million investment in the stock during the quarter. The other funds with brand new IMGN positions are Michael Gelband's ExodusPoint Capital and Jonathan Soros's JS Capital.
Let's now review hedge fund activity in other stocks similar to ImmunoGen, Inc. (NASDAQ:IMGN). We will take a look at Columbus McKinnon Corporation (NASDAQ:CMCO), Accel Entertainment, Inc. (NYSE:ACEL), Changyou.Com Ltd (NASDAQ:CYOU), and Universal Insurance Holdings, Inc. (NYSE:UVE). This group of stocks' market valuations match IMGN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CMCO,16,28308,-3 ACEL,18,69509,3 CYOU,10,72996,-3 UVE,11,35019,-2 Average,13.75,51458,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $151 million in IMGN's case. Accel Entertainment, Inc. (NYSE:ACEL) is the most popular stock in this table. On the other hand Changyou.Com Ltd (NASDAQ:CYOU) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks ImmunoGen, Inc. (NASDAQ:IMGN) is more popular among hedge funds. 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 returned 13.4% in 2020 through June 22nd but still managed to beat the market by 15.9 percentage points. Hedge funds were also right about betting on IMGN as the stock returned 34.5% so far in Q2 (through June 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.