The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of IMARA Inc. (NASDAQ:IMRA).
IMARA Inc. (NASDAQ:IMRA) has experienced an increase in enthusiasm from smart money of late. Our calculations also showed that IMRA 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Kolchinsky of RA Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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 glance at the key hedge fund action surrounding IMARA Inc. (NASDAQ:IMRA).
How are hedge funds trading IMARA Inc. (NASDAQ:IMRA)?
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8 from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in IMRA 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.
More specifically, OrbiMed Advisors was the largest shareholder of IMARA Inc. (NASDAQ:IMRA), with a stake worth $43.6 million reported as of the end of September. Trailing OrbiMed Advisors was RA Capital Management, which amassed a stake valued at $23.3 million. Deerfield Management, Rock Springs Capital Management, and Driehaus Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position RA Capital Management allocated the biggest weight to IMARA Inc. (NASDAQ:IMRA), around 0.74% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, dishing out 0.73 percent of its 13F equity portfolio to IMRA.
As one would reasonably expect, some big names were leading the bulls’ herd. OrbiMed Advisors, managed by Samuel Isaly, assembled the most outsized position in IMARA Inc. (NASDAQ:IMRA). OrbiMed Advisors had $43.6 million invested in the company at the end of the quarter. Peter Kolchinsky’s RA Capital Management also initiated a $23.3 million position during the quarter. The other funds with brand new IMRA positions are James E. Flynn’s Deerfield Management, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management, and Richard Driehaus’s Driehaus Capital.
Let’s go over hedge fund activity in other stocks similar to IMARA Inc. (NASDAQ:IMRA). These stocks are Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), The Cato Corporation (NYSE:CATO), Nexgen Energy Ltd. (NYSE:NXE), and Guaranty Bancshares, Inc. (NASDAQ:GNTY). This group of stocks’ market valuations are similar to IMRA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPPI | 8 | 8908 | -5 |
| CATO | 10 | 18891 | -5 |
| NXE | 5 | 9155 | -1 |
| GNTY | 2 | 2887 | -1 |
| Average | 6.25 | 9960 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $87 million in IMRA’s case. The Cato Corporation (NYSE:CATO) is the most popular stock in this table. On the other hand Guaranty Bancshares, Inc. (NASDAQ:GNTY) is the least popular one with only 2 bullish hedge fund positions. IMARA Inc. (NASDAQ:IMRA) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on IMRA as the stock returned 165.4% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.