We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (read our latest 10 coronavirus predictions).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. We at Insider Monkey have gone over 835 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of Genmab A/S (NASDAQ:GMAB) based on that data.
Genmab A/S (NASDAQ:GMAB) was in 12 hedge funds’ portfolios at the end of December. GMAB investors should be aware of an increase in activity from the world’s largest hedge funds of late. There were 11 hedge funds in our database with GMAB positions at the end of the previous quarter. Our calculations also showed that GMAB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings).
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 41 percentage points since March 2017 (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 35.3% through March 3rd. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Andreas Halvorsen of Viking Global
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the key hedge fund action surrounding Genmab A/S (NASDAQ:GMAB).
How have hedgies been trading Genmab A/S (NASDAQ:GMAB)?
Heading into the first quarter of 2020, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the third quarter of 2019. The graph below displays the number of hedge funds with bullish position in GMAB over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Lei Zhang’s Hillhouse Capital Management has the largest position in Genmab A/S (NASDAQ:GMAB), worth close to $33.5 million, accounting for 0.4% of its total 13F portfolio. The second largest stake is held by Redmile Group, managed by Jeremy Green, which holds a $20.9 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism include Stuart J. Zimmer’s Zimmer Partners, Andreas Halvorsen’s Viking Global and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Redmile Group allocated the biggest weight to Genmab A/S (NASDAQ:GMAB), around 0.5% of its 13F portfolio. Hillhouse Capital Management is also relatively very bullish on the stock, setting aside 0.42 percent of its 13F equity portfolio to GMAB.
Now, some big names have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in Genmab A/S (NASDAQ:GMAB). Balyasny Asset Management had $0.9 million invested in the company at the end of the quarter. Louis Navellier’s Navellier & Associates also made a $0.6 million investment in the stock during the quarter. The only other fund with a new position in the stock is Rajiv Jain’s GQG Partners.
Let’s also examine hedge fund activity in other stocks similar to Genmab A/S (NASDAQ:GMAB). These stocks are Ulta Beauty, Inc. (NASDAQ:ULTA), Hasbro, Inc. (NASDAQ:HAS), Citrix Systems, Inc. (NASDAQ:CTXS), and CenturyLink, Inc. (NYSE:CTL). This group of stocks’ market valuations are similar to GMAB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ULTA | 41 | 1245257 | 0 |
| HAS | 36 | 523095 | 4 |
| CTXS | 34 | 1513753 | 3 |
| CTL | 34 | 1144168 | 2 |
| Average | 36.25 | 1106568 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.25 hedge funds with bullish positions and the average amount invested in these stocks was $1107 million. That figure was $108 million in GMAB’s case. Ulta Beauty, Inc. (NASDAQ:ULTA) is the most popular stock in this table. On the other hand Citrix Systems, Inc. (NASDAQ:CTXS) is the least popular one with only 34 bullish hedge fund positions. Compared to these stocks Genmab A/S (NASDAQ:GMAB) is even less popular than CTXS. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 22.3% in 2020 through March 16th but managed to beat the market by 3.2 percentage points. A small number of hedge funds were also right about betting on GMAB, though not to the same extent, as the stock returned -23.2% during the same time period and outperformed the market as well.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
