Will the new coronavirus cause a recession in US in the next 6 months? On February 27th, we put the probability at 75% and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Iovance Biotherapeutics, Inc. (NASDAQ:IOVA).
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that IOVA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 let’s take a glance at the new hedge fund action regarding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA).
What have hedge funds been doing with Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)?
At the end of the fourth quarter, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IOVA over the last 18 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Perceptive Advisors, managed by Joseph Edelman, holds the biggest position in Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Perceptive Advisors has a $260.6 million position in the stock, comprising 5.2% of its 13F portfolio. Sitting at the No. 2 spot is venBio Select Advisor, led by Behzad Aghazadeh, holding a $244.3 million position; 7.2% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism comprise Farallon Capital, Samuel Isaly’s OrbiMed Advisors and Jeffrey Jay and David Kroin’s Great Point Partners. In terms of the portfolio weights assigned to each position Great Point Partners allocated the biggest weight to Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), around 12.09% of its 13F portfolio. Frazier Healthcare Partners is also relatively very bullish on the stock, designating 8.13 percent of its 13F equity portfolio to IOVA.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Logos Capital, managed by Arsani William, initiated the biggest position in Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Logos Capital had $6.1 million invested in the company at the end of the quarter. Oleg Nodelman’s EcoR1 Capital also initiated a $5.9 million position during the quarter. The following funds were also among the new IOVA investors: Michael Rockefeller and Karl Kroeker’s Woodline Partners, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, and D. E. Shaw’s D E Shaw.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) but similarly valued. These stocks are Louisiana-Pacific Corporation (NYSE:LPX), J&J Snack Foods Corp. (NASDAQ:JJSF), Energizer Holdings, Inc. (NYSE:ENR), and Corelogic Inc (NYSE:CLGX). This group of stocks’ market values are similar to IOVA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LPX | 29 | 565644 | -6 |
| JJSF | 13 | 121267 | -7 |
| ENR | 22 | 193079 | 3 |
| CLGX | 28 | 383328 | -3 |
| Average | 23 | 315830 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $316 million. That figure was $1333 million in IOVA’s case. Louisiana-Pacific Corporation (NYSE:LPX) is the most popular stock in this table. On the other hand J&J Snack Foods Corp. (NASDAQ:JJSF) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is more popular among hedge funds. 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 17.4% in 2020 through March 25th but still managed to beat the market by 5.5 percentage points. Hedge funds were also right about betting on IOVA as the stock returned 9.7% so far in Q1 (through March 25th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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.
