Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by nearly 9 percentage points since the end of the third quarter of 2018 as investors worried over the possible ramifications of rising interest rates and escalation of the trade war with China. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor (i.e. only 298 S&P 500 constituents were among the 500 most popular stocks among hedge funds), and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of ImmunoGen, Inc. (NASDAQ:IMGN) and see how the stock is affected by the recent hedge fund activity.
ImmunoGen, Inc. (NASDAQ:IMGN) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds' portfolios at the end of the first quarter of 2019. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as TCR2 Therapeutics Inc. (NASDAQ:TCRR), PDF Solutions, Inc. (NASDAQ:PDFS), and Bar Harbor Bankshares (NYSE:BHB) to gather more data points.
In today’s marketplace there are a multitude of methods stock market investors put to use to value their holdings. A couple of the less known methods are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the elite money managers can outperform the market by a superb amount (see the details here).
[caption id="attachment_758500" align="aligncenter" width="450"] Daniel Gold of QVT Financial[/caption]
Let's check out the latest hedge fund action regarding ImmunoGen, Inc. (NASDAQ:IMGN).
How are hedge funds trading ImmunoGen, Inc. (NASDAQ:IMGN)?
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in IMGN a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in ImmunoGen, Inc. (NASDAQ:IMGN) was held by Redmile Group, which reported holding $35.4 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $19.1 million position. Other investors bullish on the company included Millennium Management, Millennium Management, and QVT Financial.
Because ImmunoGen, Inc. (NASDAQ:IMGN) has experienced declining sentiment from hedge fund managers, logic holds that there were a few hedgies that slashed their entire stakes by the end of the third quarter. Intriguingly, Steve Cohen's Point72 Asset Management dumped the largest stake of all the hedgies watched by Insider Monkey, comprising close to $12.7 million in stock. James A. Silverman's fund, Opaleye Management, also dumped its stock, about $4.9 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as ImmunoGen, Inc. (NASDAQ:IMGN) but similarly valued. We will take a look at TCR2 Therapeutics Inc. (NASDAQ:TCRR), PDF Solutions, Inc. (NASDAQ:PDFS), Bar Harbor Bankshares (NYSE:BHB), and Insteel Industries Inc (NASDAQ:IIIN). All of these stocks' market caps are similar to IMGN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TCRR,5,39383,5 PDFS,9,45669,-2 BHB,3,16489,0 IIIN,8,52127,-4 Average,6.25,38417,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $69 million in IMGN's case. PDF Solutions, Inc. (NASDAQ:PDFS) is the most popular stock in this table. On the other hand Bar Harbor Bankshares (NYSE:BHB) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks ImmunoGen, Inc. (NASDAQ:IMGN) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately IMGN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on IMGN were disappointed as the stock returned -21.8% during the same period 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 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.