Is QURE Stock A Buy or Sell?

At Insider Monkey, we pore over the filings of nearly 887 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of December 31st. In this article, we will use that wealth of knowledge to determine whether or not Uniqure NV (NASDAQ:QURE) makes for a good investment right now.

Is QURE stock a buy or sell?Hedge funds were taking a pessimistic view. The number of bullish hedge fund positions fell by 1 lately. Uniqure NV (NASDAQ:QURE) was in 35 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 49. Our calculations also showed that QURE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 36 hedge funds in our database with QURE holdings at the end of September.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Paul Marshall of Marshall Wace

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. Keeping this in mind let’s check out the new hedge fund action surrounding Uniqure NV (NASDAQ:QURE).

Do Hedge Funds Think QURE Is A Good Stock To Buy Now?

At fourth quarter’s end, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from one quarter earlier. By comparison, 44 hedge funds held shares or bullish call options in QURE a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

Among these funds, Nantahala Capital Management held the most valuable stake in Uniqure NV (NASDAQ:QURE), which was worth $59.1 million at the end of the fourth quarter. On the second spot was Redmile Group which amassed $37.2 million worth of shares. OrbiMed Advisors, Aquilo Capital Management, and Marshall Wace LLP 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 Aquilo Capital Management allocated the biggest weight to Uniqure NV (NASDAQ:QURE), around 5.27% of its 13F portfolio. Nantahala Capital Management is also relatively very bullish on the stock, earmarking 1.83 percent of its 13F equity portfolio to QURE.

Because Uniqure NV (NASDAQ:QURE) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers who were dropping their full holdings last quarter. It’s worth mentioning that Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor) dumped the largest position of the “upper crust” of funds watched by Insider Monkey, totaling about $64.5 million in stock. Richard Mashaal’s fund, Rima Senvest Management, also cut its stock, about $11.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Uniqure NV (NASDAQ:QURE). These stocks are Cohu, Inc. (NASDAQ:COHU), Ligand Pharmaceuticals Inc. (NASDAQ:LGND), Avaya Holdings Corp. (NYSE:AVYA), Patrick Industries, Inc. (NASDAQ:PATK), The Macerich Company (NYSE:MAC), American Woodmark Corporation (NASDAQ:AMWD), and Big Lots, Inc. (NYSE:BIG). This group of stocks’ market valuations resemble QURE’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.7 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $346 million in QURE’s case. Avaya Holdings Corp. (NYSE:AVYA) is the most popular stock in this table. On the other hand American Woodmark Corporation (NASDAQ:AMWD) is the least popular one with only 11 bullish hedge fund positions. Uniqure NV (NASDAQ:QURE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for QURE is 75.4. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 0.4 percentage points. Unfortunately QURE wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on QURE were disappointed as the stock returned -5.6% since the end of December (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 many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.