Hedge Funds Are Crazy About Chinook Therapeutics, Inc. (KDNY)

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 June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Chinook Therapeutics, Inc. (NASDAQ:KDNY).

Chinook Therapeutics, Inc. (NASDAQ:KDNY) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. Chinook Therapeutics, Inc. (NASDAQ:KDNY) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 15 hedge funds in our database with KDNY positions at the end of the first quarter. Our calculations also showed that KDNY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At the moment there are many methods stock traders use to size up stocks. A pair of the less known methods are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can beat the S&P 500 by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Steven Cohen of Point72 Asset Management

With all of this in mind we’re going to take a look at the fresh hedge fund action encompassing Chinook Therapeutics, Inc. (NASDAQ:KDNY).

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

At second quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in KDNY 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.

The largest stake in Chinook Therapeutics, Inc. (NASDAQ:KDNY) was held by Samsara BioCapital, which reported holding $44.7 million worth of stock at the end of June. It was followed by Point72 Asset Management with a $21.1 million position. Other investors bullish on the company included OrbiMed Advisors, Armistice Capital, and Frazier Healthcare Partners. In terms of the portfolio weights assigned to each position SilverArc Capital allocated the biggest weight to Chinook Therapeutics, Inc. (NASDAQ:KDNY), around 5.7% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, dishing out 5.52 percent of its 13F equity portfolio to KDNY.

As one would reasonably expect, key hedge funds were breaking ground themselves. Armistice Capital, managed by Steven Boyd, assembled the most outsized position in Chinook Therapeutics, Inc. (NASDAQ:KDNY). Armistice Capital had $17.5 million invested in the company at the end of the quarter. Alan Frazier’s Frazier Healthcare Partners also initiated a $15.5 million position during the quarter. The other funds with brand new KDNY positions are Devesh Gandhi’s SilverArc Capital, Frank Fu’s CaaS Capital, and Efrem Kamen’s Pura Vida Investments.

Let’s go over hedge fund activity in other stocks similar to Chinook Therapeutics, Inc. (NASDAQ:KDNY). We will take a look at Comtech Telecommunications Corp. (NASDAQ:CMTL), Aspira Women’s Health Inc. (NASDAQ:AWH), VSE Corporation (NASDAQ:VSEC), Select Energy Services, Inc. (NYSE:WTTR), Universal Logistics Holdings, Inc. (NASDAQ:ULH), CRA International, Inc. (NASDAQ:CRAI), and CONSOL Energy Inc. (NYSE:CEIX). This group of stocks’ market valuations match KDNY’s market valuation.

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As you can see these stocks had an average of 11.6 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $225 million in KDNY’s case. Select Energy Services, Inc. (NYSE:WTTR) is the most popular stock in this table. On the other hand VSE Corporation (NASDAQ:VSEC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Chinook Therapeutics, Inc. (NASDAQ:KDNY) is more popular among hedge funds. Our overall hedge fund sentiment score for KDNY is 89. 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% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately KDNY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on KDNY were disappointed as the stock returned -22.8% since the end of the second quarter (through 10/22) 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.

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