The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Surface Oncology, Inc. (NASDAQ:SURF).
Is Surface Oncology, Inc. (NASDAQ:SURF) a buy, sell, or hold? Money managers were getting less bullish. The number of long hedge fund positions decreased by 5 lately. Surface Oncology, Inc. (NASDAQ:SURF) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 22. Our calculations also showed that SURF 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.
Cathie Wood of ARK Investment 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. With all of this in mind we’re going to check out the new hedge fund action regarding Surface Oncology, Inc. (NASDAQ:SURF).
Do Hedge Funds Think SURF Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from the first quarter of 2020. On the other hand, there were a total of 11 hedge funds with a bullish position in SURF a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Catherine D. Wood’s ARK Investment Management has the largest position in Surface Oncology, Inc. (NASDAQ:SURF), worth close to $33.4 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $13.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism contain Farallon Capital, Greg Martinez’s Parkman Healthcare Partners and Michael Rockefeller and KarláKroeker’s Woodline Partners. In terms of the portfolio weights assigned to each position Parkman Healthcare Partners allocated the biggest weight to Surface Oncology, Inc. (NASDAQ:SURF), around 0.37% of its 13F portfolio. SilverArc Capital is also relatively very bullish on the stock, designating 0.31 percent of its 13F equity portfolio to SURF.
Since Surface Oncology, Inc. (NASDAQ:SURF) has faced falling interest from the smart money, it’s safe to say that there were a few hedgies who sold off their full holdings last quarter. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors dumped the largest stake of all the hedgies watched by Insider Monkey, comprising an estimated $1.1 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund cut about $1.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 5 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Surface Oncology, Inc. (NASDAQ:SURF) but similarly valued. We will take a look at The First Bancorp, Inc. (NASDAQ:FNLC), RedHill Biopharma Ltd (NASDAQ:RDHL), MEI Pharma Inc (NASDAQ:MEIP), Paratek Pharmaceuticals Inc (NASDAQ:PRTK), Kura Sushi USA, Inc. (NASDAQ:KRUS), Athersys, Inc. (NASDAQ:ATHX), and Infrastructure and Energy Alternatives, Inc. (NASDAQ:IEA). This group of stocks’ market valuations are closest to SURF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FNLC | 1 | 4214 | 0 |
| RDHL | 4 | 11034 | 0 |
| MEIP | 16 | 45804 | -1 |
| PRTK | 16 | 34516 | 7 |
| KRUS | 6 | 17670 | 1 |
| ATHX | 6 | 2514 | -1 |
| IEA | 10 | 56284 | -3 |
| Average | 8.4 | 24577 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $59 million in SURF’s case. MEI Pharma Inc (NASDAQ:MEIP) is the most popular stock in this table. On the other hand The First Bancorp, Inc. (NASDAQ:FNLC) is the least popular one with only 1 bullish hedge fund positions. Surface Oncology, Inc. (NASDAQ:SURF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SURF is 43.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately SURF wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SURF were disappointed as the stock returned 1.2% since the end of June (through 9/27) 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 many of these stocks already outperformed the market since 2019.
Follow Surface Oncology Inc.
Follow Surface Oncology Inc.
Suggested Articles:
- 20 Fastest Growing Tech Cities In The World
- 12 Best Solar Energy Stocks To Invest In
- 15 Best Long-Term Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
