We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. That's a big deal.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Agenus Inc (NASDAQ:AGEN) investors should pay attention to an increase in activity from the world's largest hedge funds lately. Our calculations also showed that AGEN 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.
If you'd ask most stock holders, hedge funds are viewed as unimportant, outdated financial tools of years past. While there are more than 8000 funds trading today, We hone in on the crème de la crème of this club, around 750 funds. It is estimated that this group of investors orchestrate the majority of the hedge fund industry's total asset base, and by observing their unrivaled investments, Insider Monkey has come up with a number of investment strategies that have historically defeated the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_735677" align="aligncenter" width="473"] Sander Gerber of Hudson Bay Capital 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 based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let's review the new hedge fund action regarding Agenus Inc (NASDAQ:AGEN).
What have hedge funds been doing with Agenus Inc (NASDAQ:AGEN)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in AGEN a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, D E Shaw, managed by David E. Shaw, holds the number one position in Agenus Inc (NASDAQ:AGEN). D E Shaw has a $4.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $1.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions consist of John Overdeck and David Siegel's Two Sigma Advisors, Sander Gerber's Hudson Bay Capital Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position HighVista Strategies allocated the biggest weight to Agenus Inc (NASDAQ:AGEN), around 0.04% of its 13F portfolio. Hudson Bay Capital Management is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to AGEN.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls' herd. Renaissance Technologies, initiated the most valuable position in Agenus Inc (NASDAQ:AGEN). Renaissance Technologies had $0.2 million invested in the company at the end of the quarter. Cliff Asness's AQR Capital Management also initiated a $0.1 million position during the quarter. The only other fund with a brand new AGEN position is Andre F. Perold's HighVista Strategies.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Agenus Inc (NASDAQ:AGEN) but similarly valued. These stocks are Calix Inc (NYSE:CALX), Health Insurance Innovations Inc (NASDAQ:HIIQ), DURECT Corporation (NASDAQ:DRRX), and Ladenburg Thalmann Financial Services Inc. (NYSE:LTS). This group of stocks' market valuations resemble AGEN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CALX,14,82824,0 HIIQ,15,90739,-4 DRRX,9,44901,4 LTS,6,2560,1 Average,11,55256,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $8 million in AGEN's case. Health Insurance Innovations Inc (NASDAQ:HIIQ) is the most popular stock in this table. On the other hand Ladenburg Thalmann Financial Services Inc. (NYSE:LTS) is the least popular one with only 6 bullish hedge fund positions. Agenus Inc (NASDAQ:AGEN) 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 AGEN as the stock returned 62.4% 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.