Is SGEN Stock A Buy or Sell?

In this article we will check out the progression of hedge fund sentiment towards Seagen Inc. (NASDAQ:SGEN) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is SGEN stock a buy? The best stock pickers were in a bullish mood. The number of bullish hedge fund positions inched up by 4 lately. Seagen Inc. (NASDAQ:SGEN) was in 32 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 38. Our calculations also showed that SGEN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Felix Baker of Baker Bros.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 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 let’s take a glance at the latest hedge fund action encompassing Seagen Inc. (NASDAQ:SGEN).

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

At the end of December, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the third quarter of 2020. By comparison, 36 hedge funds held shares or bullish call options in SGEN a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Julian Baker and Felix Baker’s Baker Bros. Advisors has the biggest position in Seagen Inc. (NASDAQ:SGEN), worth close to $8.2788 billion, amounting to 31.2% of its total 13F portfolio. On Baker Bros. Advisors’s heels is AQR Capital Management, managed by Cliff Asness, which holds a $60.7 million position; 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism encompass Nancy Zevenbergen’s Zevenbergen Capital Investments, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Baker Bros. Advisors allocated the biggest weight to Seagen Inc. (NASDAQ:SGEN), around 31.19% of its 13F portfolio. Rhenman & Partners Asset Management is also relatively very bullish on the stock, designating 0.93 percent of its 13F equity portfolio to SGEN.

Consequently, key money managers have jumped into Seagen Inc. (NASDAQ:SGEN) headfirst. Millennium Management, managed by Israel Englander, established the most outsized position in Seagen Inc. (NASDAQ:SGEN). Millennium Management had $11.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $4 million investment in the stock during the quarter. The following funds were also among the new SGEN investors: Dmitry Balyasny’s Balyasny Asset Management, Matthew Hulsizer’s PEAK6 Capital Management, and Greg Eisner’s Engineers Gate Manager.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Seagen Inc. (NASDAQ:SGEN) but similarly valued. These stocks are SBA Communications Corporation (NASDAQ:SBAC), Royalty Pharma Plc (NASDAQ:RPRX), ANSYS, Inc. (NASDAQ:ANSS), AFLAC Incorporated (NYSE:AFL), Credit Suisse Group AG (NYSE:CS), Kinder Morgan Inc (NYSE:KMI), and Prudential Financial Inc (NYSE:PRU). This group of stocks’ market caps are closest to SGEN’s market cap.

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As you can see these stocks had an average of 32.1 hedge funds with bullish positions and the average amount invested in these stocks was $1254 million. That figure was $8619 million in SGEN’s case. SBA Communications Corporation (NASDAQ:SBAC) is the most popular stock in this table. On the other hand Credit Suisse Group AG (NYSE:CS) is the least popular one with only 11 bullish hedge fund positions. Seagen Inc. (NASDAQ:SGEN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SGEN is 67.1. 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. This is a slightly negative signal and 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 12.2% in 2021 through April 12th and surpassed the market again by 1.5 percentage points. Unfortunately SGEN wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); SGEN investors were disappointed as the stock returned -19.7% since the end of December (through 4/12) 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 in 2020.

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

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