"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in its Q1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Kura Oncology, Inc. (NASDAQ:KURA).
Is Kura Oncology, Inc. (NASDAQ:KURA) a splendid investment right now? Investors who are in the know are in an optimistic mood. The number of bullish hedge fund positions rose by 2 lately. Our calculations also showed that KURA isn't among the 30 most popular stocks among hedge funds. KURA was in 17 hedge funds' portfolios at the end of the first quarter of 2019. There were 15 hedge funds in our database with KURA positions at the end of the previous quarter.
In the eyes of most investors, hedge funds are viewed as slow, old investment vehicles of years past. While there are over 8000 funds trading at present, Our experts hone in on the elite of this club, approximately 750 funds. These money managers command most of all hedge funds' total capital, and by monitoring their highest performing equity investments, Insider Monkey has formulated several investment strategies that have historically outrun the broader indices. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
We're going to take a glance at the latest hedge fund action encompassing Kura Oncology, Inc. (NASDAQ:KURA).
How are hedge funds trading Kura Oncology, Inc. (NASDAQ:KURA)?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards KURA over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, EcoR1 Capital held the most valuable stake in Kura Oncology, Inc. (NASDAQ:KURA), which was worth $87.5 million at the end of the first quarter. On the second spot was Great Point Partners which amassed $43.9 million worth of shares. Moreover, Biotechnology Value Fund / BVF Inc, Cormorant Asset Management, and Prosight Capital were also bullish on Kura Oncology, Inc. (NASDAQ:KURA), allocating a large percentage of their portfolios to this stock.
Now, specific money managers have been driving this bullishness. GLG Partners, managed by Noam Gottesman, initiated the most valuable position in Kura Oncology, Inc. (NASDAQ:KURA). GLG Partners had $1.6 million invested in the company at the end of the quarter. David P. Cohen's Minerva Advisors also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson's Adage Capital Management, James A. Silverman's Opaleye Management, and Paul Marshall and Ian Wace's Marshall Wace LLP.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Kura Oncology, Inc. (NASDAQ:KURA) but similarly valued. These stocks are Acorda Therapeutics Inc (NASDAQ:ACOR), Clean Energy Fuels Corp (NASDAQ:CLNE), i3 Verticals, Inc. (NASDAQ:IIIV), and Irsa Inversiones y Representaciones Sociedad Anónima (NYSE:IRS). This group of stocks' market valuations resemble KURA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACOR,22,161061,0 CLNE,11,32009,3 IIIV,8,66259,0 IRS,8,48594,1 Average,12.25,76981,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $207 million in KURA's case. Acorda Therapeutics Inc (NASDAQ:ACOR) is the most popular stock in this table. On the other hand i3 Verticals, Inc. (NASDAQ:IIIV) is the least popular one with only 8 bullish hedge fund positions. Kura Oncology, Inc. (NASDAQ:KURA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately KURA wasn't nearly as popular as these 20 stocks and hedge funds that were betting on KURA were disappointed as the stock returned -3.7% 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 so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.