Here is What Hedge Funds Think About ImmunoGen, Inc. (IMGN)

The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at ImmunoGen, Inc. (NASDAQ:IMGN) from the perspective of those elite funds.

Hedge fund interest in ImmunoGen, Inc. (NASDAQ:IMGN) shares’ was flat at the end of the last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Greenhill & Co., Inc. (NYSE:GHL), Hibbett Sports, Inc. (NASDAQ:HIBB), and Endologix, Inc. (NASDAQ:ELGX) to gather more data points.

To most stock holders, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation at the moment, Our experts choose to focus on the top tier of this club, approximately 700 funds. It is estimated that this group of investors has their hands on the lion’s share of the smart money’s total asset base, and by following their top stock picks, Insider Monkey has discovered many investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, let’s view the recent action regarding ImmunoGen, Inc. (NASDAQ:IMGN).

Hedge fund activity in ImmunoGen, Inc. (NASDAQ:IMGN)

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, flat over the last quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Samuel Isaly’s OrbiMed Advisors has the biggest position in ImmunoGen, Inc. (NASDAQ:IMGN), worth close to $34.5 million, amounting to 0.3% of its total 13F portfolio. The second largest stake is held by Julian Baker and Felix Baker of Baker Bros. Advisors, with a $34.1 million position; 0.3% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish comprise Israel Englander’s Millennium Management, D E Shaw, and Renaissance Technologies.

Judging by the fact that ImmunoGen, Inc. (NASDAQ:IMGN) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds who sold off their positions entirely heading into Q4. Intriguingly, Richard Driehaus’ Driehaus Capital dumped the biggest position of the “upper crust” of funds monitored by Insider Monkey, comprising about $2.5 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also cut its stock, about $1.8 million worth of shares. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks similar to ImmunoGen, Inc. (NASDAQ:IMGN). We will take a look at Greenhill & Co., Inc. (NYSE:GHL), Hibbett Sports, Inc. (NASDAQ:HIBB), Endologix, Inc. (NASDAQ:ELGX), and Teekay Tankers Ltd. (NYSE:TNK). This group of stocks’ market valuations is closest to ImmunoGen, Inc. (NASDAQ:IMGN)’s market valuation.

As you can see, these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $99 million in ImmunoGen, Inc. (NASDAQ:IMGN)’s case. Endologix, Inc. (NASDAQ:ELGX) is the most popular stock in this table. On the other hand, Hibbett Sports, Inc. (NASDAQ:HIBB) is the least popular one with only 11 bullish hedge fund positions. ImmunoGen, Inc. (NASDAQ:IMGN) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Endologix, Inc. (NASDAQ:ELGX) might be a better candidate to consider a long position.