Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article, we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of Replimune Group, Inc. (NASDAQ:REPL) based on that data.
Is Replimune Group, Inc. (NASDAQ:REPL) a buy, sell, or hold? Investors who are in the know are in a pessimistic mood. The number of bullish hedge fund positions went down by 1 lately. 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 below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor, there are a large number of formulas investors employ to evaluate publicly traded companies. A duo of the most useful formulas is hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can trounce the S&P 500 by a very impressive margin (see the details here).
[caption id="attachment_26340" align="alignnone" width="594"] Ken Griffin of Citadel Investment Group[/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 as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Now let's view the new hedge fund action encompassing Replimune Group, Inc. (NASDAQ:REPL).
How have hedgies been trading Replimune Group, Inc. (NASDAQ:REPL)?
Heading into the fourth quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards REPL over the last 17 quarters. With hedgies' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in Replimune Group, Inc. (NASDAQ:REPL) was held by Redmile Group, which reported holding $30.8 million worth of stock at the end of September. It was followed by Biotechnology Value Fund with a $24.3 million position. Other investors bullish on the company included Foresite Capital, Citadel Investment Group, and Polar Capital. In terms of the portfolio weights assigned to each position, Foresite Capital allocated the biggest weight to Replimune Group, Inc. (NASDAQ:REPL), around 3.02% of its 13F portfolio. Biotechnology Value Fund is also relatively very bullish on the stock, dishing out 2.56 percent of its 13F equity portfolio to REPL.
We view hedge fund activity in the stock unfavorable, but in this case, there was only a single hedge fund selling its entire position: Springbok Capital. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified REPL as a viable investment and initiated a position in the stock.
Let's check out hedge fund activity in other stocks similar to Replimune Group, Inc. (NASDAQ:REPL). These stocks are Ares Commercial Real Estate Corp (NYSE:ACRE), Domo Inc. (NASDAQ:DOMO), Diamond S Shipping Inc. (NYSE:DSSI), and Penn Virginia Corporation (NASDAQ:PVAC). All of these stocks' market caps resemble REPL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ACRE,10,20541,-3 DOMO,14,94401,0 DSSI,15,138795,4 PVAC,16,183867,-1 Average,13.75,109401,0 [/table]
View the table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $109 million. That figure was $68 million in REPL's case. Penn Virginia Corporation (NASDAQ:PVAC) is the most popular stock in this table. On the other hand, Ares Commercial Real Estate Corp (NYSE:ACRE) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Replimune Group, Inc. (NASDAQ:REPL) is even less popular than ACRE. Hedge funds dodged a bullet by taking a bearish stance towards REPL. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately REPL wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); REPL investors were disappointed as the stock returned 0% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.