At the end of February we announced the arrival of the first US recession since 2009 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 Genmab A/S (NASDAQ:GMAB).
Genmab A/S (NASDAQ:GMAB) was in 14 hedge funds’ portfolios at the end of the first quarter of 2020. GMAB investors should pay attention to an increase in hedge fund interest in recent months. There were 12 hedge funds in our database with GMAB holdings 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 Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most investors, hedge funds are perceived as slow, old financial tools of yesteryear. While there are more than 8000 funds trading at the moment, We choose to focus on the upper echelon of this group, around 850 funds. Most estimates calculate that this group of people direct bulk of the smart money’s total asset base, and by following their inimitable stock picks, Insider Monkey has determined a few investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Lei Zhang of Hillhouse Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the 10 stocks that went up during the 2008 crash to identify the companies that are likely to deliver double digit returns in up and down markets. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a look at the latest hedge fund action surrounding Genmab A/S (NASDAQ:GMAB).
How have hedgies been trading Genmab A/S (NASDAQ:GMAB)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GMAB over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Redmile Group, managed by Jeremy Green, holds the largest position in Genmab A/S (NASDAQ:GMAB). Redmile Group has a $32.8 million position in the stock, comprising 0.9% of its 13F portfolio. Coming in second is Lei Zhang of Hillhouse Capital Management, with a $31.8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers that hold long positions encompass Andreas Halvorsen’s Viking Global, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Oleg Nodelman’s EcoR1 Capital. In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Genmab A/S (NASDAQ:GMAB), around 1.45% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, earmarking 0.92 percent of its 13F equity portfolio to GMAB.
As aggregate interest increased, key hedge funds were breaking ground themselves. EcoR1 Capital, managed by Oleg Nodelman, established the biggest position in Genmab A/S (NASDAQ:GMAB). EcoR1 Capital had $13.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $5 million position during the quarter. The only other fund with a brand new GMAB position is Renaissance Technologies.
Let’s check out hedge fund activity in other stocks similar to Genmab A/S (NASDAQ:GMAB). These stocks are Align Technology, Inc. (NASDAQ:ALGN), Teleflex Incorporated (NYSE:TFX), Avangrid, Inc. (NYSE:AGR), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO). All of these stocks’ market caps are similar to GMAB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALGN | 39 | 1396832 | -1 |
| TFX | 32 | 766334 | 0 |
| AGR | 18 | 242937 | -1 |
| TTWO | 66 | 1949928 | 7 |
| Average | 38.75 | 1089008 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.75 hedge funds with bullish positions and the average amount invested in these stocks was $1089 million. That figure was $130 million in GMAB’s case. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is the most popular stock in this table. On the other hand Avangrid, Inc. (NYSE:AGR) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Genmab A/S (NASDAQ:GMAB) is even less popular than AGR. Hedge funds clearly dropped the ball on GMAB as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on GMAB as the stock returned 57.2% so far in the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
