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 first 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 4.5 years and analyze what the smart money thinks of IGM Biosciences, Inc. (NASDAQ:IGMS) based on that data.
Is IGM Biosciences, Inc. (NASDAQ:IGMS) undervalued? Prominent investors are becoming hopeful. The number of long hedge fund bets moved up by 2 in recent months. Our calculations also showed that IGMS isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 financial world there are numerous gauges investors use to value publicly traded companies. Two of the less utilized gauges are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the best money managers can beat the S&P 500 by a healthy margin (see the details here).
Oleg Nodelman of EcoR1 Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s go over the key hedge fund action encompassing IGM Biosciences, Inc. (NASDAQ:IGMS).
How are hedge funds trading IGM Biosciences, Inc. (NASDAQ:IGMS)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IGMS over the last 18 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Baker Bros. Advisors was the largest shareholder of IGM Biosciences, Inc. (NASDAQ:IGMS), with a stake worth $176.5 million reported as of the end of September. Trailing Baker Bros. Advisors was Redmile Group, which amassed a stake valued at $176.5 million. RA Capital Management, Alkeon Capital Management, and Cormorant Asset 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 Redmile Group allocated the biggest weight to IGM Biosciences, Inc. (NASDAQ:IGMS), around 4.95% of its 13F portfolio. Logos Capital is also relatively very bullish on the stock, dishing out 3.71 percent of its 13F equity portfolio to IGMS.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, initiated the most outsized position in IGM Biosciences, Inc. (NASDAQ:IGMS). Alkeon Capital Management had $27.2 million invested in the company at the end of the quarter. Christopher James’s Partner Fund Management also made a $9.2 million investment in the stock during the quarter. The following funds were also among the new IGMS investors: Samuel Isaly’s OrbiMed Advisors, Michael Gelband’s ExodusPoint Capital, and Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks similar to IGM Biosciences, Inc. (NASDAQ:IGMS). These stocks are Afya Limited (NASDAQ:AFYA), TeleTech Holdings, Inc. (NASDAQ:TTEC), Chimera Investment Corporation (NYSE:CIM), and Summit Materials Inc (NYSE:SUM). This group of stocks’ market valuations resemble IGMS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AFYA | 8 | 54892 | -1 |
| TTEC | 15 | 36684 | -11 |
| CIM | 17 | 49036 | 3 |
| SUM | 27 | 248345 | -8 |
| Average | 16.75 | 97239 | -4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $518 million in IGMS’s case. Summit Materials Inc (NYSE:SUM) is the most popular stock in this table. On the other hand Afya Limited (NASDAQ:AFYA) is the least popular one with only 8 bullish hedge fund positions. IGM Biosciences, Inc. (NASDAQ:IGMS) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on IGMS as the stock returned 33.9% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
