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In this article we will take a look at whether hedge funds think Replimune Group, Inc. (NASDAQ:REPL) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is REPL a good stock to buy now? Replimune Group, Inc. (NASDAQ:REPL) investors should pay attention to an increase in enthusiasm from smart money recently. Replimune Group, Inc. (NASDAQ:REPL) was in 14 hedge funds' portfolios at the end of September. The all time high for this statistic is 11. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that REPL isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Now let's take a glance at the fresh hedge fund action surrounding Replimune Group, Inc. (NASDAQ:REPL).
Do Hedge Funds Think REPL Is A Good Stock To Buy Now?
At Q3's end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in REPL over the last 21 quarters. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Redmile Group, managed by Jeremy Green, holds the biggest position in Replimune Group, Inc. (NASDAQ:REPL). Redmile Group has a $76.7 million position in the stock, comprising 1.4% of its 13F portfolio. Coming in second is Mark Lampert of Biotechnology Value Fund / BVF Inc, with a $38.9 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Some other peers that are bullish consist of Steve Cohen's Point72 Asset Management, Mark Hart III's Corriente Advisors and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Corriente Advisors allocated the biggest weight to Replimune Group, Inc. (NASDAQ:REPL), around 5.98% of its 13F portfolio. Biotechnology Value Fund / BVF Inc is also relatively very bullish on the stock, earmarking 2.12 percent of its 13F equity portfolio to REPL.
As industrywide interest jumped, some big names have jumped into Replimune Group, Inc. (NASDAQ:REPL) headfirst. Point72 Asset Management, managed by Steve Cohen, assembled the largest position in Replimune Group, Inc. (NASDAQ:REPL). Point72 Asset Management had $22.7 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also made a $0.9 million investment in the stock during the quarter. The other funds with brand new REPL positions are D. E. Shaw's D E Shaw, Joseph Edelman's Perceptive Advisors, and Israel Englander's Millennium Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Replimune Group, Inc. (NASDAQ:REPL) but similarly valued. We will take a look at Arvinas, Inc. (NASDAQ:ARVN), BioLife Solutions, Inc. (NASDAQ:BLFS), New Mountain Finance Corp. (NYSE:NMFC), City Holding Company (NASDAQ:CHCO), NetGear, Inc. (NASDAQ:NTGR), Pitney Bowes Inc. (NYSE:PBI), and Enanta Pharmaceuticals Inc (NASDAQ:ENTA). This group of stocks' market values resemble REPL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARVN,26,181239,-5 BLFS,13,254136,2 NMFC,10,22832,0 CHCO,6,6311,0 NTGR,20,65372,1 PBI,23,111860,12 ENTA,20,186651,0 Average,16.9,118343,1.4 [/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 $118 million. That figure was $169 million in REPL's case. Arvinas, Inc. (NASDAQ:ARVN) is the most popular stock in this table. On the other hand City Holding Company (NASDAQ:CHCO) is the least popular one with only 6 bullish hedge fund positions. Replimune Group, Inc. (NASDAQ:REPL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for REPL is 58. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on REPL as the stock returned 102.9% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.