Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Immatics N.V. (NASDAQ:IMTX).
Is IMTX a good stock to buy? Immatics N.V. (NASDAQ:IMTX) investors should pay attention to an increase in enthusiasm from smart money recently. Immatics N.V. (NASDAQ:IMTX) was in 23 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMTX 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.
Joseph Edelman of Perceptive Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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 analyze the fresh hedge fund action encompassing Immatics N.V. (NASDAQ:IMTX).
Do Hedge Funds Think IMTX Is A Good Stock To Buy Now?
At first quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IMTX over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baker Bros. Advisors held the most valuable stake in Immatics N.V. (NASDAQ:IMTX), which was worth $44.8 million at the end of the fourth quarter. On the second spot was Perceptive Advisors which amassed $28 million worth of shares. Nantahala Capital Management, Alyeska Investment Group, and Redmile Group 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 Nantahala Capital Management allocated the biggest weight to Immatics N.V. (NASDAQ:IMTX), around 0.8% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, designating 0.7 percent of its 13F equity portfolio to IMTX.
Consequently, some big names have jumped into Immatics N.V. (NASDAQ:IMTX) headfirst. Tri Locum Partners, managed by Prashanth Jayaram, established the most valuable position in Immatics N.V. (NASDAQ:IMTX). Tri Locum Partners had $1.4 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $0.5 million position during the quarter. The following funds were also among the new IMTX investors: Devesh Gandhi’s SilverArc Capital and Steve Pigott’s Fort Baker Capital Management.
Let’s go over hedge fund activity in other stocks similar to Immatics N.V. (NASDAQ:IMTX). We will take a look at Denison Mines Corp (NYSE:DNN), A10 Networks Inc (NYSE:ATEN), Maverix Metals Inc. (NYSE:MMX), Alliance Resource Partners, L.P. (NASDAQ:ARLP), BEST Inc. (NYSE:BEST), Clovis Oncology Inc (NASDAQ:CLVS), and Koppers Holdings Inc. (NYSE:KOP). All of these stocks’ market caps resemble IMTX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DNN | 10 | 18188 | 4 |
| ATEN | 15 | 141659 | -7 |
| MMX | 6 | 30937 | -3 |
| ARLP | 7 | 37543 | 1 |
| BEST | 5 | 857 | -5 |
| CLVS | 14 | 75987 | -3 |
| KOP | 11 | 42001 | -2 |
| Average | 9.7 | 49596 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $192 million in IMTX’s case. A10 Networks Inc (NYSE:ATEN) is the most popular stock in this table. On the other hand BEST Inc. (NYSE:BEST) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Immatics N.V. (NASDAQ:IMTX) is more popular among hedge funds. Our overall hedge fund sentiment score for IMTX is 86. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately IMTX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IMTX were disappointed as the stock returned 7.4% since the end of the first quarter (through 7/16) 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 Immatics N.v. (NASDAQ:IMTX)
Follow Immatics N.v. (NASDAQ:IMTX)
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Disclosure: None. This article was originally published at Insider Monkey.
