Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Immunovant, Inc. (NASDAQ:IMVT) changed recently.
Is IMVT stock a buy? Immunovant, Inc. (NASDAQ:IMVT) investors should pay attention to an increase in support from the world’s most elite money managers in recent months. Immunovant, Inc. (NASDAQ:IMVT) was in 36 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMVT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Kris Jenner of Rock Springs Capital Management
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 124 percentage points since March 2017 (see the details here). At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 website. Now we’re going to take a gander at the recent hedge fund action surrounding Immunovant, Inc. (NASDAQ:IMVT).
Do Hedge Funds Think IMVT Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 24% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in IMVT over the last 22 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Bihua Chen’s Cormorant Asset Management has the largest position in Immunovant, Inc. (NASDAQ:IMVT), worth close to $72.2 million, comprising 1.7% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson of Adage Capital Management, with a $64.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass Joseph Edelman’s Perceptive Advisors, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management. In terms of the portfolio weights assigned to each position Acuta Capital Partners allocated the biggest weight to Immunovant, Inc. (NASDAQ:IMVT), around 3.56% of its 13F portfolio. Ghost Tree Capital is also relatively very bullish on the stock, earmarking 3.09 percent of its 13F equity portfolio to IMVT.
As one would reasonably expect, key hedge funds have been driving this bullishness. Darwin Global Management, managed by Abhishek Trehan, created the most valuable position in Immunovant, Inc. (NASDAQ:IMVT). Darwin Global Management had $9.2 million invested in the company at the end of the quarter. Devesh Gandhi’s SilverArc Capital also initiated a $4.6 million position during the quarter. The other funds with brand new IMVT positions are Egen Atkinson and Michael Kramarz’s Commodore Capital, Dmitry Balyasny’s Balyasny Asset Management, and Zach Schreiber’s Point State Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Immunovant, Inc. (NASDAQ:IMVT) but similarly valued. We will take a look at Quaker Chemical Corp (NYSE:KWR), Crane Co. (NYSE:CR), SAGE Therapeutics Inc (NASDAQ:SAGE), ICU Medical, Inc. (NASDAQ:ICUI), MAXIMUS, Inc. (NYSE:MMS), RBC Bearings Incorporated (NASDAQ:ROLL), and ACI Worldwide Inc (NASDAQ:ACIW). All of these stocks’ market caps resemble IMVT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KWR | 13 | 187153 | -3 |
| CR | 24 | 265292 | -5 |
| SAGE | 29 | 622755 | -5 |
| ICUI | 22 | 359044 | -9 |
| MMS | 24 | 144428 | 2 |
| ROLL | 14 | 48268 | -4 |
| ACIW | 30 | 721729 | 1 |
| Average | 22.3 | 335524 | -3.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $336 million. That figure was $578 million in IMVT’s case. ACI Worldwide Inc (NASDAQ:ACIW) is the most popular stock in this table. On the other hand Quaker Chemical Corp (NYSE:KWR) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Immunovant, Inc. (NASDAQ:IMVT) is more popular among hedge funds. Our overall hedge fund sentiment score for IMVT is 90. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Unfortunately IMVT wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on IMVT were disappointed as the stock returned -63.5% since the end of the fourth quarter (through 4/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
