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Last year's fourth quarter was a rough one for investors and many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 37.4% in 2019 (through the end of November) and outperformed the S&P 500 ETF by 9.9 percentage points. We are done processing the latest 13F filings and in this article we will study how hedge fund sentiment towards Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) changed during the first quarter.
Is Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) worth your attention right now? Money managers are becoming less confident. The number of long hedge fund positions dropped by 1 lately. Our calculations also showed that CRBP 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.
In the financial world there are a lot of formulas stock traders use to size up stocks. A couple of the most underrated formulas are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can outperform their index-focused peers by a solid amount (see the details here).
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David E. Shaw of D.E. Shaw[/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 Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP).
Hedge fund activity in Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP)
Heading into the fourth quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the previous quarter. By comparison, 5 hedge funds held shares or bullish call options in CRBP a year ago. With hedgies' capital changing hands, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
Among these funds, Knoll Capital Management held the most valuable stake in Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), which was worth $24.3 million at the end of the third quarter. On the second spot was D E Shaw which amassed $3.6 million worth of shares. DAFNA Capital Management, Sculptor Capital, and Citadel Investment Group 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 Knoll Capital Management allocated the biggest weight to Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), around 22.22% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, designating 0.54 percent of its 13F equity portfolio to CRBP.
Seeing as Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) has witnessed a decline in interest from hedge fund managers, logic holds that there exists a select few fund managers that slashed their positions entirely in the third quarter. Intriguingly, Israel Englander's Millennium Management said goodbye to the largest investment of the 750 funds monitored by Insider Monkey, valued at about $5.2 million in stock. Michael Gelband's fund, ExodusPoint Capital, also dumped its stock, about $0.1 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 funds in the third quarter.
Let's go over hedge fund activity in other stocks similar to Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP). These stocks are North American Energy Partners Inc.(USA) (NYSE:NOA), Akazoo S.A. (NASDAQ:SONG), Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), and Prothena Corporation plc (NASDAQ:PRTA). This group of stocks' market valuations are closest to CRBP's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NOA,10,47482,1 SONG,4,5292,-2 RIGL,16,59317,2 PRTA,17,156799,-1 Average,11.75,67223,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $30 million in CRBP's case. Prothena Corporation plc (NASDAQ:PRTA) is the most popular stock in this table. On the other hand Akazoo S.A. (NASDAQ:SONG) is the least popular one with only 4 bullish hedge fund positions. Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately CRBP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CRBP investors were disappointed as the stock returned -3.5% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.