It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The Standard and Poor’s 500 Index returned approximately 20% in the first 9 months of this year (through September 30th). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 24% during the same 9-month period, with the majority of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds’ consensus stock picks generate superior risk-adjusted returns. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like ImmunoGen, Inc. (NASDAQ:IMGN).
Is ImmunoGen, Inc. (NASDAQ:IMGN) an excellent stock to buy now? Hedge funds are in a pessimistic mood. The number of bullish hedge fund bets decreased by 1 lately. Our calculations also showed that IMGN isn’t among the 30 most popular stocks among hedge funds (see the video below). IMGN was in 15 hedge funds’ portfolios at the end of June. There were 16 hedge funds in our database with IMGN positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are viewed as unimportant, old financial vehicles of the past. While there are over 8000 funds trading at the moment, Our researchers hone in on the masters of this club, about 750 funds. These hedge fund managers preside over the majority of the hedge fund industry’s total capital, and by keeping an eye on their first-class equity investments, Insider Monkey has formulated numerous investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. We’re going to take a glance at the latest hedge fund action surrounding ImmunoGen, Inc. (NASDAQ:IMGN).
How are hedge funds trading ImmunoGen, Inc. (NASDAQ:IMGN)?
Heading into the third quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IMGN over the last 16 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 increasing their holdings substantially (or already accumulated large positions).
More specifically, Redmile Group was the largest shareholder of ImmunoGen, Inc. (NASDAQ:IMGN), with a stake worth $30.3 million reported as of the end of March. Trailing Redmile Group was Renaissance Technologies, which amassed a stake valued at $15 million. Millennium Management, QVT Financial, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
Because ImmunoGen, Inc. (NASDAQ:IMGN) has experienced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers who were dropping their positions entirely last quarter. Interestingly, Steve Cohen’s Point72 Asset Management dropped the biggest investment of the “upper crust” of funds followed by Insider Monkey, worth an estimated $1.2 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $1.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to ImmunoGen, Inc. (NASDAQ:IMGN). We will take a look at Forum Energy Technologies Inc (NYSE:FET), GTY Technology Holdings, Inc. (NASDAQ:GTYH), Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), and Artesian Resources Corporation (NASDAQ:ARTNA). All of these stocks’ market caps match IMGN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FET | 19 | 58008 | 3 |
| GTYH | 4 | 23213 | -5 |
| ASPS | 9 | 48629 | -1 |
| ARTNA | 3 | 16708 | 0 |
| Average | 8.75 | 36640 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $61 million in IMGN’s case. Forum Energy Technologies Inc (NYSE:FET) is the most popular stock in this table. On the other hand Artesian Resources Corporation (NASDAQ:ARTNA) is the least popular one with only 3 bullish hedge fund positions. ImmunoGen, Inc. (NASDAQ:IMGN) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on IMGN as the stock returned 11.5% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
