It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren’t usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index’s returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you’d fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of 4 percentage points during the first 9 months of 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Uniqure NV (NASDAQ:QURE).
Is Uniqure NV (NASDAQ:QURE) a great investment right now? The best stock pickers are in an optimistic mood. The number of bullish hedge fund positions increased by 6 lately. Our calculations also showed that QURE isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? 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 market by 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s view the new hedge fund action surrounding Uniqure NV (NASDAQ:QURE).
What does smart money think about Uniqure NV (NASDAQ:QURE)?
At Q2’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in QURE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Uniqure NV (NASDAQ:QURE) was held by Consonance Capital Management, which reported holding $149.4 million worth of stock at the end of March. It was followed by Redmile Group with a $130.5 million position. Other investors bullish on the company included Nantahala Capital Management, Nantahala Capital Management, and OrbiMed Advisors.
As aggregate interest increased, specific money managers were breaking ground themselves. OrbiMed Advisors, managed by Samuel Isaly, assembled the largest position in Uniqure NV (NASDAQ:QURE). OrbiMed Advisors had $70.2 million invested in the company at the end of the quarter. Bihua Chen’s Cormorant Asset Management also initiated a $46.9 million position during the quarter. The other funds with new positions in the stock are Doug Silverman and Alexander Klabin’s Senator Investment Group, Steve Cohen’s Point72 Asset Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s also examine hedge fund activity in other stocks similar to Uniqure NV (NASDAQ:QURE). We will take a look at AU Optronics Corp. (NYSE:AUO), SiteOne Landscape Supply, Inc. (NYSE:SITE), Intelsat S.A. (NYSE:I), and Lithia Motors Inc (NYSE:LAD). This group of stocks’ market caps are closest to QURE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AUO | 7 | 60738 | -1 |
| SITE | 12 | 39922 | 0 |
| I | 42 | 839597 | -12 |
| LAD | 21 | 550945 | 4 |
| Average | 20.5 | 372801 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $373 million. That figure was $892 million in QURE’s case. Intelsat S.A. (NYSE:I) is the most popular stock in this table. On the other hand AU Optronics Corp. (NYSE:AUO) is the least popular one with only 7 bullish hedge fund positions. Uniqure NV (NASDAQ:QURE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately QURE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on QURE were disappointed as the stock returned -49.6% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
