The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Genocea Biosciences Inc (NASDAQ:GNCA).
Genocea Biosciences Inc (NASDAQ:GNCA) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of the third quarter of 2019. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Mersana Therapeutics, Inc. (NASDAQ:MRSN), IF Bancorp Inc (NASDAQ:IROQ), and Electrameccanica Vehicles Corp.(NASDAQ:SOLO) to gather more data points. Our calculations also showed that GNCA 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Mark Kingdon of Kingdon Capital
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 take a look at the recent hedge fund action regarding Genocea Biosciences Inc (NASDAQ:GNCA).
What does smart money think about Genocea Biosciences Inc (NASDAQ:GNCA)?
Heading into the fourth quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in GNCA a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Biotechnology Value Fund was the largest shareholder of Genocea Biosciences Inc (NASDAQ:GNCA), with a stake worth $6.1 million reported as of the end of September. Trailing Biotechnology Value Fund was Kingdon Capital, which amassed a stake valued at $2 million. Vivo Capital, DAFNA Capital Management, and Sabby Capital 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 Sabby Capital allocated the biggest weight to Genocea Biosciences Inc (NASDAQ:GNCA), around 0.75% of its 13F portfolio. Biotechnology Value Fund is also relatively very bullish on the stock, dishing out 0.64 percent of its 13F equity portfolio to GNCA.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: 999. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Sabby Capital).
Let’s now review hedge fund activity in other stocks similar to Genocea Biosciences Inc (NASDAQ:GNCA). We will take a look at Mersana Therapeutics, Inc. (NASDAQ:MRSN), IF Bancorp Inc (NASDAQ:IROQ), Electrameccanica Vehicles Corp. (NASDAQ:SOLO), and Fauquier Bankshares, Inc. (NASDAQ:FBSS). This group of stocks’ market values match GNCA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRSN | 13 | 21203 | -1 |
| IROQ | 1 | 2125 | -1 |
| SOLO | 2 | 648 | 0 |
| FBSS | 2 | 8860 | 0 |
| Average | 4.5 | 8209 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $15 million in GNCA’s case. Mersana Therapeutics, Inc. (NASDAQ:MRSN) is the most popular stock in this table. On the other hand IF Bancorp Inc (NASDAQ:IROQ) is the least popular one with only 1 bullish hedge fund positions. Genocea Biosciences Inc (NASDAQ:GNCA) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately GNCA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GNCA were disappointed as the stock returned -13.8% during the fourth quarter (through the end of November) 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.
