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Where Do Hedge Funds Stand On Surface Oncology, Inc. (SURF)?

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Asma UL Husna
·5 min read
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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Surface Oncology, Inc. (NASDAQ:SURF).

Surface Oncology, Inc. (NASDAQ:SURF) shareholders have witnessed an increase in enthusiasm from smart money recently. Surface Oncology, Inc. (NASDAQ:SURF) was in 13 hedge funds' portfolios at the end of the third quarter of 2020. 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. There were 11 hedge funds in our database with SURF positions at the end of the second quarter. Our calculations also showed that SURF 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.

Today there are several indicators stock traders employ to grade publicly traded companies. A couple of the most useful indicators are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top money managers can outpace their index-focused peers by a very impressive amount (see the details here).

Oleg Nodelman EcoR1 Capital
Oleg Nodelman EcoR1 Capital

Oleg Nodelman of EcoR1 Capital

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. With all of this in mind we're going to take a peek at the latest hedge fund action surrounding Surface Oncology, Inc. (NASDAQ:SURF).

Do Hedge Funds Think SURF Is A Good Stock To Buy Now?

At the end of September, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the second quarter of 2020. On the other hand, there were a total of 5 hedge funds with a bullish position in SURF a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Surface Oncology, Inc. (NASDAQ:SURF) was held by EcoR1 Capital, which reported holding $23 million worth of stock at the end of September. It was followed by Point72 Asset Management with a $12.4 million position. Other investors bullish on the company included Acuta Capital Partners, Ghost Tree Capital, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Acuta Capital Partners allocated the biggest weight to Surface Oncology, Inc. (NASDAQ:SURF), around 2.04% of its 13F portfolio. Ghost Tree Capital is also relatively very bullish on the stock, setting aside 1.99 percent of its 13F equity portfolio to SURF.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, established the largest position in Surface Oncology, Inc. (NASDAQ:SURF). Point72 Asset Management had $12.4 million invested in the company at the end of the quarter. Noam Gottesman's GLG Partners also initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Peter Muller's PDT Partners, Greg Eisner's Engineers Gate Manager, and Andre F. Perold's HighVista Strategies.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Surface Oncology, Inc. (NASDAQ:SURF) but similarly valued. We will take a look at Clearfield, Inc. (NASDAQ:CLFD), Independent Bank Corporation (NASDAQ:IBCP), Xeris Pharmaceuticals, Inc. (NASDAQ:XERS), Guaranty Bancshares, Inc. (NASDAQ:GNTY), Anavex Life Sciences Corp. (NASDAQ:AVXL), Bridgewater Bancshares, Inc. (NASDAQ:BWB), and Yiren Digital Ltd. (NYSE:YRD). This group of stocks' market valuations are closest to SURF's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLFD,3,13830,-1 IBCP,13,24898,-1 XERS,13,49164,-7 GNTY,2,3343,0 AVXL,3,3308,-2 BWB,6,19703,-3 YRD,2,1534,1 Average,6,16540,-1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $57 million in SURF's case. Independent Bank Corporation (NASDAQ:IBCP) is the most popular stock in this table. On the other hand Guaranty Bancshares, Inc. (NASDAQ:GNTY) is the least popular one with only 2 bullish hedge fund positions. Surface Oncology, Inc. (NASDAQ:SURF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SURF is 87. 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. Hedge funds were also right about betting on SURF as the stock returned 29.3% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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