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 second 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 5 years and analyze what the smart money thinks of Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) based on that data and determine whether they were really smart about the stock.
Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) has seen an increase in enthusiasm from smart money of late. Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) was in 18 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 12. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 11 hedge funds in our database with CRNX positions at the end of the first quarter. Our calculations also showed that CRNX isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
In the eyes of most shareholders, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are greater than 8000 funds trading today, We choose to focus on the moguls of this group, around 850 funds. It is estimated that this group of investors control the majority of all hedge funds’ total asset base, and by following their matchless stock picks, Insider Monkey has unearthed numerous investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Richard Driehaus of Driehaus Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. 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. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. With all of this in mind let’s analyze the recent hedge fund action encompassing Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX).
What have hedge funds been doing with Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX)?
Heading into the third quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 64% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in CRNX 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.
More specifically, Perceptive Advisors was the largest shareholder of Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX), with a stake worth $59.2 million reported as of the end of September. Trailing Perceptive Advisors was OrbiMed Advisors, which amassed a stake valued at $48.2 million. RA Capital Management, Vivo Capital, and Driehaus 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 Vivo Capital allocated the biggest weight to Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX), around 2.91% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, setting aside 2.9 percent of its 13F equity portfolio to CRNX.
Consequently, key money managers have jumped into Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) headfirst. Driehaus Capital, managed by Richard Driehaus, created the largest position in Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX). Driehaus Capital had $15.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $6.9 million investment in the stock during the quarter. The following funds were also among the new CRNX investors: Israel Englander’s Millennium Management, Renaissance Technologies, and Andre F. Perold’s HighVista Strategies.
Let’s now take a look at hedge fund activity in other stocks similar to Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX). These stocks are Echo Global Logistics, Inc. (NASDAQ:ECHO), Universal Insurance Holdings, Inc. (NYSE:UVE), UroGen Pharma Ltd. (NASDAQ:URGN), Calliditas Therapeutics AB (NASDAQ:CALT), Yunji Inc. (NASDAQ:YJ), Nicolet Bankshares Inc. (NASDAQ:NCBS), and Vectrus Inc (NYSE:VEC). This group of stocks’ market values are closest to CRNX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ECHO | 13 | 22396 | 0 |
| UVE | 16 | 37617 | 5 |
| URGN | 5 | 27760 | -2 |
| CALT | 12 | 72791 | 12 |
| YJ | 4 | 2237 | 0 |
| NCBS | 4 | 4094 | -1 |
| VEC | 16 | 55368 | 1 |
| Average | 10 | 31752 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $251 million in CRNX’s case. Universal Insurance Holdings, Inc. (NYSE:UVE) is the most popular stock in this table. On the other hand Yunji Inc. (NASDAQ:YJ) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) is more popular among hedge funds. Our overall hedge fund sentiment score for CRNX 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 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 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Unfortunately CRNX wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CRNX were disappointed as the stock returned -10.6% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
