Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by nearly 10 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Unum Therapeutics Inc. (NASDAQ:UMRX).
Unum Therapeutics Inc. (NASDAQ:UMRX) shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months. Our calculations also showed that UMRX 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 eyes of most market participants, hedge funds are assumed to be worthless, old investment tools of yesteryear. While there are over 8000 funds in operation at the moment, Our researchers look at the aristocrats of this group, approximately 750 funds. These hedge fund managers administer bulk of all hedge funds’ total capital, and by keeping track of their unrivaled equity investments, Insider Monkey has discovered a few investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Israel Englander of Millennium Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now let’s view the new hedge fund action surrounding Unum Therapeutics Inc. (NASDAQ:UMRX).
How have hedgies been trading Unum Therapeutics Inc. (NASDAQ:UMRX)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in UMRX 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.
According to Insider Monkey’s hedge fund database, Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, holds the biggest position in Unum Therapeutics Inc. (NASDAQ:UMRX). Sectoral Asset Management has a $2.2 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions include Donald Sussman’s Paloma Partners, Renaissance Technologies and . In terms of the portfolio weights assigned to each position Sectoral Asset Management allocated the biggest weight to Unum Therapeutics Inc. (NASDAQ:UMRX), around 0.38% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, earmarking 0.0012 percent of its 13F equity portfolio to UMRX.
Since Unum Therapeutics Inc. (NASDAQ:UMRX) has witnessed declining sentiment from the smart money, it’s easy to see that there were a few fund managers that slashed their full holdings heading into Q4. At the top of the heap, Kerr Neilson’s Platinum Asset Management dropped the biggest investment of the 750 funds tracked by Insider Monkey, comprising about $0.4 million in stock. Hal Mintz’s fund, Sabby Capital, also dumped its stock, about $0.1 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Unum Therapeutics Inc. (NASDAQ:UMRX) but similarly valued. We will take a look at BK Technologies, Inc. (NYSE:BKTI), Broadway Financial Corporation (NASDAQ:BYFC), Kewaunee Scientific Corporation (NASDAQ:KEQU), and Fuling Global Inc. (NASDAQ:FORK). This group of stocks’ market caps are closest to UMRX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BKTI | 1 | 2137 | 0 |
| BYFC | 1 | 32 | 0 |
| KEQU | 2 | 1777 | 1 |
| FORK | 2 | 613 | 0 |
| Average | 1.5 | 1140 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.5 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $3 million in UMRX’s case. Kewaunee Scientific Corporation (NASDAQ:KEQU) is the most popular stock in this table. On the other hand BK Technologies, Inc. (NYSE:BKTI) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Unum Therapeutics Inc. (NASDAQ:UMRX) is more popular among hedge funds. 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 UMRX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on UMRX were disappointed as the stock returned -48.9% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
