In this article we will analyze whether Mersana Therapeutics, Inc. (NASDAQ:MRSN) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Mersana Therapeutics, Inc. (NASDAQ:MRSN) investors should be aware of an increase in hedge fund interest lately. Mersana Therapeutics, Inc. (NASDAQ:MRSN) was in 28 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that MRSN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Kris Jenner of Rock Springs Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we’re going to analyze the fresh hedge fund action surrounding Mersana Therapeutics, Inc. (NASDAQ:MRSN).
Do Hedge Funds Think MRSN Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from one quarter earlier. By comparison, 25 hedge funds held shares or bullish call options in MRSN 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, Avoro Capital Advisors (venBio Select Advisor) was the largest shareholder of Mersana Therapeutics, Inc. (NASDAQ:MRSN), with a stake worth $92.3 million reported as of the end of June. Trailing Avoro Capital Advisors (venBio Select Advisor) was Sarissa Capital Management, which amassed a stake valued at $54.4 million. Rock Springs Capital Management, OrbiMed Advisors, and Alkeon Capital 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 Sarissa Capital Management allocated the biggest weight to Mersana Therapeutics, Inc. (NASDAQ:MRSN), around 4.33% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, setting aside 2.01 percent of its 13F equity portfolio to MRSN.
As aggregate interest increased, specific money managers were breaking ground themselves. Hudson Bay Capital Management, managed by Sander Gerber, initiated the largest position in Mersana Therapeutics, Inc. (NASDAQ:MRSN). Hudson Bay Capital Management had $1 million invested in the company at the end of the quarter. Andre F. Perold’s HighVista Strategies also initiated a $0.8 million position during the quarter. The other funds with new positions in the stock are Jinghua Yan’s TwinBeech Capital, Michael Gelband’s ExodusPoint Capital, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Mersana Therapeutics, Inc. (NASDAQ:MRSN) but similarly valued. These stocks are Kelly Services, Inc. (NASDAQ:KELYA), EverQuote, Inc. (NASDAQ:EVER), America’s Car-Mart, Inc. (NASDAQ:CRMT), Boston Omaha Corporation (NASDAQ:BOMN), ProPetro Holding Corp. (NYSE:PUMP), Douglas Dynamics Inc (NYSE:PLOW), and ChemoCentryx Inc (NASDAQ:CCXI). All of these stocks’ market caps are closest to MRSN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KELYA | 9 | 13535 | 1 |
| EVER | 13 | 73638 | -6 |
| CRMT | 16 | 90573 | 6 |
| BOMN | 3 | 260200 | 1 |
| PUMP | 16 | 53327 | -1 |
| PLOW | 11 | 26142 | 4 |
| CCXI | 14 | 84576 | -6 |
| Average | 11.7 | 85999 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.7 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $295 million in MRSN’s case. America’s Car-Mart, Inc. (NASDAQ:CRMT) is the most popular stock in this table. On the other hand Boston Omaha Corporation (NASDAQ:BOMN) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Mersana Therapeutics, Inc. (NASDAQ:MRSN) is more popular among hedge funds. Our overall hedge fund sentiment score for MRSN is 86. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Unfortunately MRSN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MRSN were disappointed as the stock returned -37.5% since the end of the second quarter (through 10/15) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Mersana Therapeutics Inc. (NASDAQ:MRSN)
Follow Mersana Therapeutics Inc. (NASDAQ:MRSN)
Suggested Articles:
- 13 Most Influential Women To Watch in 2021
- 17 safest european countries for solo female travelers
- 20 Chinese Companies Listed on NYSE/NASDAQ/AMEX
Disclosure: None. This article was originally published at Insider Monkey.
