At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. Our calculations also showed that YMAB isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We’re going to check out the latest hedge fund action encompassing Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB).
Hedge fund activity in Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB)
Heading into the first quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -45% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in YMAB a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Among these funds, Scopia Capital held the most valuable stake in Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), which was worth $31.3 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $7.9 million worth of shares. Moreover, venBio Select Advisor, Cormorant Asset Management, and Baker Bros. Advisors were also bullish on Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), allocating a large percentage of their portfolios to this stock.
Since Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) has witnessed declining sentiment from the smart money, it’s safe to say that there is a sect of fund managers who were dropping their entire stakes heading into Q3. Interestingly, Thomas Steyer’s Farallon Capital sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, comprising close to $3.3 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also said goodbye to its stock, about $1.3 million worth. These transactions are important to note, as total hedge fund interest dropped by 5 funds heading into Q3.
Let’s check out hedge fund activity in other stocks similar to Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB). We will take a look at FutureFuel Corp. (NYSE:FF), UroGen Pharma Ltd. (NASDAQ:URGN), German American Bancorp., Inc. (NASDAQ:GABC), and INTL Fcstone Inc (NASDAQ:INTL). This group of stocks’ market caps are closest to YMAB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FF | 14 | 57050 | 3 |
| URGN | 12 | 142984 | -1 |
| GABC | 4 | 6870 | -1 |
| INTL | 13 | 73556 | 3 |
| Average | 10.75 | 70115 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $52 million in YMAB’s case. FutureFuel Corp. (NYSE:FF) is the most popular stock in this table. On the other hand German American Bancorp., Inc. (NASDAQ:GABC) is the least popular one with only 4 bullish hedge fund positions. Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on YMAB, though not to the same extent, as the stock returned 18.6% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
