After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB).
Is Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) the right pick for your portfolio? Investors who are in the know are buying. The number of long hedge fund bets rose by 1 recently. Our calculations also showed that YMAB 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
[caption id="attachment_221556" align="alignnone" width="600"] Richard Driehaus of Driehaus Capital[/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. We're going to review the recent hedge fund action regarding Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB).
What does smart money think about Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB)?
Heading into the fourth quarter of 2019, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the second quarter of 2019. On the other hand, there were a total of 11 hedge funds with a bullish position in YMAB a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Cormorant Asset Management was the largest shareholder of Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), with a stake worth $23 million reported as of the end of September. Trailing Cormorant Asset Management was Perceptive Advisors, which amassed a stake valued at $22.3 million. Driehaus Capital, Millennium Management, and Baker Bros. Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Cormorant Asset Management allocated the biggest weight to Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), around 1.4% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, earmarking 0.6 percent of its 13F equity portfolio to YMAB.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Perceptive Advisors, managed by Joseph Edelman, established the most outsized position in Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB). Perceptive Advisors had $22.3 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley's Polar Capital also initiated a $0.4 million position during the quarter. The only other fund with a brand new YMAB position is Paul Marshall and Ian Wace's Marshall Wace.
Let's check out hedge fund activity in other stocks similar to Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB). These stocks are Ambac Financial Group, Inc. (NASDAQ:AMBC), Nova Measuring Instruments Ltd. (NASDAQ:NVMI), Trupanion Inc (NYSE:TRUP), and BBVA Banco Frances S.A. (NYSE:BBAR). This group of stocks' market valuations match YMAB's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMBC,14,108465,0 NVMI,10,167598,1 TRUP,10,122985,0 BBAR,9,6431,1 Average,10.75,101370,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $60 million in YMAB's case. Ambac Financial Group, Inc. (NASDAQ:AMBC) is the most popular stock in this table. On the other hand BBVA Banco Frances S.A. (NYSE:BBAR) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) is even less popular than BBAR. Hedge funds clearly dropped the ball on YMAB as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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. A small number of hedge funds were also right about betting on YMAB as the stock returned 29.5% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.