Did Hedge Funds Make The Right Call On ImmunoGen, Inc. (IMGN) ?

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 first 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 4.5 years and analyze what the smart money thinks of ImmunoGen, Inc. (NASDAQ:IMGN) based on that data and determine whether they were really smart about the stock.

ImmunoGen, Inc. (NASDAQ:IMGN) has seen an increase in activity from the world’s largest hedge funds of late. IMGN was in 19 hedge funds’ portfolios at the end of March. There were 18 hedge funds in our database with IMGN positions at the end of the previous quarter. Our calculations also showed that IMGN isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Samuel Isaly of OrbiMed Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in the world 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now let’s analyze the key hedge fund action regarding ImmunoGen, Inc. (NASDAQ:IMGN).

How are hedge funds trading ImmunoGen, Inc. (NASDAQ:IMGN)?

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in IMGN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Among these funds, Redmile Group held the most valuable stake in ImmunoGen, Inc. (NASDAQ:IMGN), which was worth $57.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $37.6 million worth of shares. RA Capital Management, D E Shaw, and Millennium Management 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 Redmile Group allocated the biggest weight to ImmunoGen, Inc. (NASDAQ:IMGN), around 1.6% of its 13F portfolio. QVT Financial is also relatively very bullish on the stock, setting aside 1.09 percent of its 13F equity portfolio to IMGN.

Now, specific money managers have jumped into ImmunoGen, Inc. (NASDAQ:IMGN) headfirst. RA Capital Management, managed by Peter Kolchinsky, assembled the largest position in ImmunoGen, Inc. (NASDAQ:IMGN). RA Capital Management had $17.6 million invested in the company at the end of the quarter. Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor) also initiated a $6.5 million position during the quarter. The other funds with brand new IMGN positions are Michael Gelband’s ExodusPoint Capital and Jonathan Soros’s JS Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ImmunoGen, Inc. (NASDAQ:IMGN) but similarly valued. We will take a look at Columbus McKinnon Corporation (NASDAQ:CMCO), Accel Entertainment, Inc. (NYSE:ACEL),Changyou.Com Ltd  (NASDAQ:CYOU), and Universal Insurance Holdings, Inc. (NYSE:UVE). This group of stocks’ market caps resemble IMGN’s market cap.

View 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 $51 million. That figure was $151 million in IMGN’s case. Accel Entertainment, Inc. (NYSE:ACEL) is the most popular stock in this table. On the other hand Changyou.Com Ltd (NASDAQ:CYOU) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks ImmunoGen, Inc. (NASDAQ:IMGN) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 18.6% in 2020 through July 27th but still managed to beat the market by 17.1 percentage points. Hedge funds were also right about betting on IMGN, though not to the same extent, as the stock returned 28.4% since Q1 and outperformed the market as well.

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