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 have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Arcus Biosciences, Inc. (NYSE:RCUS) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is RCUS a good stock to buy? Arcus Biosciences, Inc. (NYSE:RCUS) was in 27 hedge funds’ portfolios at the end of March. The all time high for this statistic is 31. RCUS has experienced a decrease in enthusiasm from smart money of late. There were 31 hedge funds in our database with RCUS holdings at the end of December. Our calculations also showed that RCUS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Oleg Nodelman of EcoR1 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a look at the latest hedge fund action regarding Arcus Biosciences, Inc. (NYSE:RCUS).
Do Hedge Funds Think RCUS Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RCUS over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Christopher James’s Partner Fund Management has the largest position in Arcus Biosciences, Inc. (NYSE:RCUS), worth close to $98.2 million, comprising 3% of its total 13F portfolio. Coming in second is Oleg Nodelman of EcoR1 Capital, with a $61.7 million position; 2.7% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish contain Mark Lampert’s Biotechnology Value Fund / BVF Inc, Michael Rockefeller and KarláKroeker’s Woodline Partners and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management. In terms of the portfolio weights assigned to each position Copernicus Capital Management allocated the biggest weight to Arcus Biosciences, Inc. (NYSE:RCUS), around 4.54% of its 13F portfolio. Octagon Capital Advisors is also relatively very bullish on the stock, dishing out 4.23 percent of its 13F equity portfolio to RCUS.
Judging by the fact that Arcus Biosciences, Inc. (NYSE:RCUS) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there were a few money managers who were dropping their entire stakes last quarter. Intriguingly, Panayotis Takis Sparaggis’s Alkeon Capital Management dumped the biggest investment of the “upper crust” of funds watched by Insider Monkey, comprising close to $10.6 million in stock. Mitchell Blutt’s fund, Consonance Capital Management, also sold off its stock, about $10.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 4 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Arcus Biosciences, Inc. (NYSE:RCUS). These stocks are Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA), Adtalem Global Education Inc. (NYSE:ATGE), Belden Inc. (NYSE:BDC), Carpenter Technology Corporation (NYSE:CRS), Super Micro Computer, Inc. (NASDAQ:SMCI), Madison Square Garden Entertainment Corp. (NYSE:MSGE), and Burford Capital Limited (NYSE:BUR). This group of stocks’ market values are closest to RCUS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IBA | 2 | 30096 | 0 |
| ATGE | 22 | 329258 | 0 |
| BDC | 17 | 163439 | 1 |
| CRS | 14 | 64400 | 0 |
| SMCI | 21 | 447309 | 1 |
| MSGE | 23 | 324971 | -4 |
| BUR | 6 | 30046 | -1 |
| Average | 15 | 198503 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $199 million. That figure was $376 million in RCUS’s case. Madison Square Garden Entertainment Corp. (NYSE:MSGE) is the most popular stock in this table. On the other hand Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Arcus Biosciences, Inc. (NYSE:RCUS) is more popular among hedge funds. Our overall hedge fund sentiment score for RCUS is 77.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Unfortunately RCUS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on RCUS were disappointed as the stock returned 3.5% since the end of the first quarter (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Arcus Biosciences Inc.
Follow Arcus Biosciences Inc.
Suggested Articles:
- How to Best Use Insider Monkey To Increase Your Returns
- 10 Best Stocks To Invest In Right Now
- 10 Best Manufacturing Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
