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Is Replimune Group, Inc. (REPL) A Good Stock To Buy?

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Abigail Fisher
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The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Replimune Group, Inc. (NASDAQ:REPL).

Replimune Group, Inc. (NASDAQ:REPL) was in 6 hedge funds' portfolios at the end of June. REPL shareholders have witnessed an increase in enthusiasm from smart money of late. There were 5 hedge funds in our database with REPL positions at the end of the previous quarter. Our calculations also showed that REPL isn't among the 30 most popular stocks among hedge funds (see the video below).

5 Most Popular Stocks Among Hedge Funds
5 Most Popular Stocks Among Hedge Funds

Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most stock holders, hedge funds are perceived as unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, Our researchers hone in on the elite of this group, about 750 funds. These money managers watch over most of the smart money's total asset base, and by shadowing their finest equity investments, Insider Monkey has come up with a few investment strategies that have historically outperformed the broader indices. Insider Monkey's flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

REPL_oct2019
REPL_oct2019

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to view the new hedge fund action surrounding Replimune Group, Inc. (NASDAQ:REPL).

What does smart money think about Replimune Group, Inc. (NASDAQ:REPL)?

Heading into the third quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards REPL over the last 16 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Jim Tananbaum - Foresite Capital
Jim Tananbaum - Foresite Capital

More specifically, Redmile Group was the largest shareholder of Replimune Group, Inc. (NASDAQ:REPL), with a stake worth $32.2 million reported as of the end of March. Trailing Redmile Group was Biotechnology Value Fund / BVF Inc, which amassed a stake valued at $25.3 million. Foresite Capital, Citadel Investment Group, and Polar Capital were also very fond of the stock, giving the stock large weights in their portfolios.

As one would reasonably expect, key hedge funds have jumped into Replimune Group, Inc. (NASDAQ:REPL) headfirst. Springbok Capital, managed by Gavin Saitowitz and Cisco J. del Valle, established the most outsized position in Replimune Group, Inc. (NASDAQ:REPL). Springbok Capital had $0 million invested in the company at the end of the quarter.

Let's check out 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 The Lovesac Company (NASDAQ:LOVE), Newtek Business Services, Corp. (NASDAQ:NEWT), Loop Industries, Inc. (NASDAQ:LOOP), and Global Indemnity Limited (NASDAQ:GBLI). This group of 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 LOVE,10,45613,2 NEWT,5,6595,-1 LOOP,1,229,-1 GBLI,6,34765,0 Average,5.5,21801,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $74 million in REPL's case. The Lovesac Company (NASDAQ:LOVE) is the most popular stock in this table. On the other hand Loop Industries, Inc. (NASDAQ:LOOP) is the least popular one with only 1 bullish hedge fund positions. Replimune Group, Inc. (NASDAQ:REPL) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately REPL wasn't nearly as popular as these 20 stocks and hedge funds that were betting on REPL were disappointed as the stock returned -5.2% during the third quarter 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 many of these stocks already outperformed the market so far this year.

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

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