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Is IMGN Stock A Buy or Sell?

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At Insider Monkey, we pore over the filings of nearly 887 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of December 31st. In this article, we will use that wealth of knowledge to determine whether or not ImmunoGen, Inc. (NASDAQ:IMGN) makes for a good investment right now.

Is IMGN stock a buy? Prominent investors were becoming more confident. The number of long hedge fund bets rose by 7 recently. ImmunoGen, Inc. (NASDAQ:IMGN) was in 25 hedge funds' portfolios at the end of December. The all time high for this statistic is 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMGN isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 18 hedge funds in our database with IMGN positions at the end of the third quarter.

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).

Peter Kolchinsky of RA Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we're going to take a glance at the recent hedge fund action surrounding ImmunoGen, Inc. (NASDAQ:IMGN).

Do Hedge Funds Think IMGN Is A Good Stock To Buy Now?

At the end of December, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 39% from the third quarter of 2020. On the other hand, there were a total of 18 hedge funds with a bullish position in IMGN a year ago. So, let's check out 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 RA Capital Management, which reported holding $118.8 million worth of stock at the end of December. It was followed by Redmile Group with a $67.9 million position. Other investors bullish on the company included Renaissance Technologies, Consonance Capital Management, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position SilverArc Capital allocated the biggest weight to ImmunoGen, Inc. (NASDAQ:IMGN), around 2.25% of its 13F portfolio. Consonance Capital Management is also relatively very bullish on the stock, designating 2.12 percent of its 13F equity portfolio to IMGN.

As one would reasonably expect, specific money managers have been driving this bullishness. Consonance Capital Management, managed by Mitchell Blutt, assembled the most valuable position in ImmunoGen, Inc. (NASDAQ:IMGN). Consonance Capital Management had $22.7 million invested in the company at the end of the quarter. OrbiMed Advisors also made a $16.5 million investment in the stock during the quarter. The other funds with brand new IMGN positions are Phill Gross and Robert Atchinson's Adage Capital Management, Farallon Capital, and Efrem Kamen's Pura Vida Investments.

Let's also examine hedge fund activity in other stocks similar to ImmunoGen, Inc. (NASDAQ:IMGN). We will take a look at Embraer SA (NYSE:ERJ), Coherus Biosciences Inc (NASDAQ:CHRS), Boot Barn Holdings Inc (NYSE:BOOT), Encore Wire Corporation (NASDAQ:WIRE), Granite Construction Incorporated (NYSE:GVA), GoPro Inc (NASDAQ:GPRO), and The E.W. Scripps Company (NASDAQ:SSP). This group of 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 ERJ,11,80236,1 CHRS,20,218861,-4 BOOT,20,97385,7 WIRE,16,64924,-6 GVA,11,20394,-3 GPRO,28,339759,14 SSP,12,133995,-2 Average,16.9,136508,1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.9 hedge funds with bullish positions and the average amount invested in these stocks was $137 million. That figure was $349 million in IMGN's case. GoPro Inc (NASDAQ:GPRO) is the most popular stock in this table. On the other hand Embraer SA (NYSE:ERJ) is the least popular one with only 11 bullish hedge fund positions. ImmunoGen, Inc. (NASDAQ:IMGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IMGN is 81.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on IMGN, though not to the same extent, as the stock returned 12.1% since Q4 (through April 19th) and outperformed the market as well.

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Disclosure: None. This article was originally published at Insider Monkey.

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