At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Seagen Inc. (NASDAQ:SGEN) makes for a good investment right now.
Seagen Inc. (NASDAQ:SGEN) was in 39 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 38. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. SGEN shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. There were 32 hedge funds in our database with SGEN positions at the end of the fourth quarter. Our calculations also showed that SGEN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Paul Marshall of Marshall Wace
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 battery 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 take a look at the new hedge fund action surrounding Seagen Inc. (NASDAQ:SGEN).
Do Hedge Funds Think SGEN Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SGEN over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the number one position in Seagen Inc. (NASDAQ:SGEN). Baker Bros. Advisors has a $6.564 billion position in the stock, comprising 28.5% of its 13F portfolio. On Baker Bros. Advisors’s heels is Redmile Group, led by Jeremy Green, holding a $130.1 million position; 1.8% of its 13F portfolio is allocated to the company. Some other peers that are bullish comprise Renaissance Technologies, Steve Cohen’s Point72 Asset Management and Paul Marshall and Ian Wace’s Marshall Wace LLP. In terms of the portfolio weights assigned to each position Baker Bros. Advisors allocated the biggest weight to Seagen Inc. (NASDAQ:SGEN), around 28.46% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, setting aside 1.83 percent of its 13F equity portfolio to SGEN.
Consequently, key money managers have been driving this bullishness. Redmile Group, managed by Jeremy Green, initiated the biggest position in Seagen Inc. (NASDAQ:SGEN). Redmile Group had $130.1 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $99.2 million investment in the stock during the quarter. The other funds with brand new SGEN positions are D. E. Shaw’s D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors, and Louis Bacon’s Moore Global Investments.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Seagen Inc. (NASDAQ:SGEN) but similarly valued. These stocks are Telefonica S.A. (NYSE:TEF), Yum China Holdings, Inc. (NYSE:YUMC), Laboratory Corp. of America Holdings (NYSE:LH), Occidental Petroleum Corporation (NYSE:OXY), Deutsche Bank AG (NYSE:DB), Expedia Group Inc (NASDAQ:EXPE), and Carnival Corporation & plc (NYSE:CUK). This group of stocks’ market caps are similar to SGEN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEF | 6 | 4834 | 1 |
| YUMC | 34 | 975839 | -5 |
| LH | 54 | 2476443 | -12 |
| OXY | 52 | 3418445 | 3 |
| DB | 16 | 1773587 | 0 |
| EXPE | 86 | 6157292 | 10 |
| CUK | 4 | 105412 | -3 |
| Average | 36 | 2130265 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $2130 million. That figure was $7467 million in SGEN’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Carnival Corporation & plc (NYSE:CUK) is the least popular one with only 4 bullish hedge fund positions. Seagen Inc. (NASDAQ:SGEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SGEN is 61.3. 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. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on SGEN, though not to the same extent, as the stock returned 13.2% since Q1 (through June 25th) and outperformed the market as well.
Follow Seagen Inc. (NASDAQ:SGEN)
Follow Seagen Inc. (NASDAQ:SGEN)
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Disclosure: None. This article was originally published at Insider Monkey.
