The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Urovant Sciences Ltd. (NASDAQ:UROV) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is Urovant Sciences Ltd. (NASDAQ:UROV) a buy here? The smart money is betting on the stock. The number of bullish hedge fund bets advanced by 3 lately. Our calculations also showed that UROV isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). UROV was in 11 hedge funds' portfolios at the end of September. There were 8 hedge funds in our database with UROV holdings at the end of the previous quarter. Video: Click the image to 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 hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_340081" align="aligncenter" width="600"] Phill Gross of Adage Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds' buy/sell signals. Let's check out the recent hedge fund action encompassing Urovant Sciences Ltd. (NASDAQ:UROV).
What does smart money think about Urovant Sciences Ltd. (NASDAQ:UROV)?
At Q3's end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the previous quarter. The graph below displays the number of hedge funds with bullish position in UROV over the last 17 quarters. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Joseph Edelman's Perceptive Advisors has the largest position in Urovant Sciences Ltd. (NASDAQ:UROV), worth close to $21.3 million, corresponding to 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $9.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism contain Peter S. Park's Park West Asset Management, Leonard A. Potter's Wildcat Capital Management and Michael Castor's Sio Capital. In terms of the portfolio weights assigned to each position Samsara BioCapital allocated the biggest weight to Urovant Sciences Ltd. (NASDAQ:UROV), around 1.01% of its 13F portfolio. Wildcat Capital Management is also relatively very bullish on the stock, setting aside 0.88 percent of its 13F equity portfolio to UROV.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Wildcat Capital Management, managed by Leonard A. Potter, established the most valuable position in Urovant Sciences Ltd. (NASDAQ:UROV). Wildcat Capital Management had $2.1 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also initiated a $0.5 million position during the quarter. The only other fund with a new position in the stock is Efrem Kamen's Pura Vida Investments.
Let's now review hedge fund activity in other stocks similar to Urovant Sciences Ltd. (NASDAQ:UROV). We will take a look at Cellular Biomedicine Group, Inc. (NASDAQ:CBMG), WhiteHorse Finance, Inc. (NASDAQ:WHF), Fiesta Restaurant Group Inc (NASDAQ:FRGI), and ViewRay, Inc. (NASDAQ:VRAY). This group of stocks' market values resemble UROV's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CBMG,2,13955,1 WHF,3,3065,-2 FRGI,14,103176,0 VRAY,20,103713,3 Average,9.75,55977,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $42 million in UROV's case. ViewRay, Inc. (NASDAQ:VRAY) is the most popular stock in this table. On the other hand Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) is the least popular one with only 2 bullish hedge fund positions. Urovant Sciences Ltd. (NASDAQ:UROV) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on UROV as the stock returned 19.3% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.