The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 750 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2019. What do these smart investors think about Cue Biopharma, Inc. (NASDAQ:CUE)?
Cue Biopharma, Inc. (NASDAQ:CUE) has seen an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that CUE 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 we’re going to take a gander at the fresh hedge fund action surrounding Cue Biopharma, Inc. (NASDAQ:CUE).
Hedge fund activity in Cue Biopharma, Inc. (NASDAQ:CUE)
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 400% from the second quarter of 2019. On the other hand, there were a total of 2 hedge funds with a bullish position in CUE a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, Nantahala Capital Management was the largest shareholder of Cue Biopharma, Inc. (NASDAQ:CUE), with a stake worth $11.6 million reported as of the end of September. Trailing Nantahala Capital Management was Slate Path Capital, which amassed a stake valued at $7.5 million. 683 Capital Partners, Millennium Management, and Parian Global 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 Slate Path Capital allocated the biggest weight to Cue Biopharma, Inc. (NASDAQ:CUE), around 0.5% of its 13F portfolio. Nantahala Capital Management is also relatively very bullish on the stock, dishing out 0.43 percent of its 13F equity portfolio to CUE.
Consequently, key money managers were breaking ground themselves. Slate Path Capital, managed by David Greenspan, initiated the most outsized position in Cue Biopharma, Inc. (NASDAQ:CUE). Slate Path Capital had $7.5 million invested in the company at the end of the quarter. Ari Zweiman’s 683 Capital Partners also made a $2.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management and Zachary Miller’s Parian Global Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cue Biopharma, Inc. (NASDAQ:CUE) but similarly valued. These stocks are Roan Resources, Inc. (NYSE:ROAN), First Northwest Bancorp (NASDAQ:FNWB), Nine Energy Service, Inc. (NYSE:NINE), and Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI). This group of stocks’ market caps match CUE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ROAN | 13 | 58682 | -1 |
| FNWB | 3 | 20926 | 1 |
| NINE | 7 | 17303 | 1 |
| RMBI | 3 | 3736 | 3 |
| Average | 6.5 | 25162 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $22 million in CUE’s case. Roan Resources, Inc. (NYSE:ROAN) is the most popular stock in this table. On the other hand First Northwest Bancorp (NASDAQ:FNWB) is the least popular one with only 3 bullish hedge fund positions. Cue Biopharma, Inc. (NASDAQ:CUE) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on CUE as the stock returned 40.5% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.