Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about ProQR Therapeutics NV (NASDAQ:PRQR).
ProQR Therapeutics NV (NASDAQ:PRQR) investors should be aware of a decrease in hedge fund sentiment recently. Our calculations also showed that prqr isn’t among the 30 most popular stocks among hedge funds.
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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s check out the latest hedge fund action encompassing ProQR Therapeutics NV (NASDAQ:PRQR).
What have hedge funds been doing with ProQR Therapeutics NV (NASDAQ:PRQR)?
Heading into the first quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the second quarter of 2018. By comparison, 5 hedge funds held shares or bullish call options in PRQR a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in ProQR Therapeutics NV (NASDAQ:PRQR), which was worth $58.9 million at the end of the fourth quarter. On the second spot was OrbiMed Advisors which amassed $22.7 million worth of shares. Moreover, Perceptive Advisors, DAFNA Capital Management, and Opus Point Partners Management were also bullish on ProQR Therapeutics NV (NASDAQ:PRQR), allocating a large percentage of their portfolios to this stock.
Because ProQR Therapeutics NV (NASDAQ:PRQR) has experienced falling interest from the smart money, it’s easy to see that there exists a select few funds that elected to cut their full holdings last quarter. Intriguingly, Jeremy Green’s Redmile Group dumped the biggest stake of the 700 funds monitored by Insider Monkey, valued at an estimated $28.1 million in stock. Ori Hershkovitz’s fund, Nexthera Capital, also dumped its stock, about $1 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to ProQR Therapeutics NV (NASDAQ:PRQR). We will take a look at Waitr Holdings Inc. (NASDAQ:WTRH), Guaranty Bancorp (NASDAQ:GBNK), Capstead Mortgage Corporation (NYSE:CMO), and Essential Properties Realty Trust, Inc. (NYSE:EPRT). This group of stocks’ market valuations match PRQR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WTRH | 18 | 166535 | -2 |
| GBNK | 11 | 57905 | -1 |
| CMO | 11 | 52323 | 4 |
| EPRT | 13 | 104932 | -3 |
| Average | 13.25 | 95424 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $105 million in PRQR’s case. Waitr Holdings Inc. (NASDAQ:WTRH) is the most popular stock in this table. On the other hand Guaranty Bancorp (NASDAQ:GBNK) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks ProQR Therapeutics NV (NASDAQ:PRQR) is even less popular than GBNK. Hedge funds dodged a bullet by taking a bearish stance towards PRQR. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately PRQR wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); PRQR investors were disappointed as the stock returned -28.1% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
