Hedge Funds Are Crazy About Fulcrum Therapeutics, Inc. (FULC)

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Fulcrum Therapeutics, Inc. (NASDAQ:FULC).

Fulcrum Therapeutics, Inc. (NASDAQ:FULC) shareholders have witnessed an increase in hedge fund sentiment of late. Fulcrum Therapeutics, Inc. (NASDAQ:FULC) was in 22 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FULC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s take a peek at the latest hedge fund action regarding Fulcrum Therapeutics, Inc. (NASDAQ:FULC).

Aaron Cowen of Suvretta Capital Management

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

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 57% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in FULC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Suvretta Capital Management held the most valuable stake in Fulcrum Therapeutics, Inc. (NASDAQ:FULC), which was worth $54.8 million at the end of the third quarter. On the second spot was Adage Capital Management which amassed $33.3 million worth of shares. D E Shaw, Polar Capital, and Rock Springs 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 Acuta Capital Partners allocated the biggest weight to Fulcrum Therapeutics, Inc. (NASDAQ:FULC), around 3.21% of its 13F portfolio. SilverArc Capital is also relatively very bullish on the stock, designating 2.96 percent of its 13F equity portfolio to FULC.

As industrywide interest jumped, key hedge funds have jumped into Fulcrum Therapeutics, Inc. (NASDAQ:FULC) headfirst. Adage Capital Management, managed by Phill Gross and Robert Atchinson, initiated the biggest position in Fulcrum Therapeutics, Inc. (NASDAQ:FULC). Adage Capital Management had $33.3 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $22.5 million position during the quarter. The other funds with brand new FULC positions are Brian Ashford-Russell and Tim Woolley’s Polar Capital, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management, and Devesh Gandhi’s SilverArc Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Fulcrum Therapeutics, Inc. (NASDAQ:FULC) but similarly valued. These stocks are Merchants Bancorp (NASDAQ:MBIN), Tango Therapeutics Inc. (NASDAQ:TNGX), Talos Energy, Inc. (NYSE:TALO), IMAX Corporation (NYSE:IMAX), Employers Holdings, Inc. (NYSE:EIG), Celestica Inc. (NYSE:CLS), and MediaAlpha, Inc. (NYSE:MAX). This group of stocks’ market values match FULC’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $118 million. That figure was $226 million in FULC’s case. Celestica Inc. (NYSE:CLS) is the most popular stock in this table. On the other hand MediaAlpha, Inc. (NYSE:MAX) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Fulcrum Therapeutics, Inc. (NASDAQ:FULC) is more popular among hedge funds. Our overall hedge fund sentiment score for FULC is 90. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately FULC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FULC were disappointed as the stock returned -37.3% since the end of the third quarter (through 12/31) 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.