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 MacroGenics Inc (NASDAQ:MGNX).
MacroGenics Inc (NASDAQ:MGNX) investors should pay attention to a decrease in support from the world’s most elite money managers lately. MacroGenics Inc (NASDAQ:MGNX) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that MGNX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Nathan Fischel of DAFNA Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s analyze the new hedge fund action encompassing MacroGenics Inc (NASDAQ:MGNX).
Do Hedge Funds Think MGNX Is A Good Stock To Buy Now?
At third quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MGNX over the last 25 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in MacroGenics Inc (NASDAQ:MGNX) was held by RA Capital Management, which reported holding $124.5 million worth of stock at the end of September. It was followed by Perceptive Advisors with a $45 million position. Other investors bullish on the company included Great Point Partners, Point72 Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Great Point Partners allocated the biggest weight to MacroGenics Inc (NASDAQ:MGNX), around 4.88% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, setting aside 1.81 percent of its 13F equity portfolio to MGNX.
Since MacroGenics Inc (NASDAQ:MGNX) has faced bearish sentiment from the smart money, we can see that there were a few funds that elected to cut their entire stakes in the third quarter. Intriguingly, Brandon Haley’s Holocene Advisors said goodbye to the biggest stake of all the hedgies watched by Insider Monkey, valued at about $40.3 million in stock. Egen Atkinson and Michael Kramarz’s fund, Commodore Capital, also dumped its stock, about $10.6 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as MacroGenics Inc (NASDAQ:MGNX) but similarly valued. We will take a look at Extreme Networks, Inc (NASDAQ:EXTR), Zealand Pharma A/S (NASDAQ:ZEAL), Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), WW International, Inc. (NASDAQ:WW), Enova International Inc (NYSE:ENVA), Heartland Express, Inc. (NASDAQ:HTLD), and Archrock, Inc. (NYSE:AROC). All of these stocks’ market caps are closest to MGNX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXTR | 20 | 123826 | 0 |
| ZEAL | 1 | 14306 | 0 |
| CCO | 28 | 257527 | 1 |
| WW | 24 | 303465 | -3 |
| ENVA | 20 | 257830 | -2 |
| HTLD | 14 | 39620 | 0 |
| AROC | 12 | 16808 | -2 |
| Average | 17 | 144769 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $145 million. That figure was $316 million in MGNX’s case. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is the most popular stock in this table. On the other hand Zealand Pharma A/S (NASDAQ:ZEAL) is the least popular one with only 1 bullish hedge fund positions. MacroGenics Inc (NASDAQ:MGNX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MGNX is 67.7. 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 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately MGNX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MGNX were disappointed as the stock returned -20.1% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.
Follow Macrogenics Inc (NASDAQ:MGNX)
Follow Macrogenics Inc (NASDAQ:MGNX)
Suggested Articles:
- 15 Biggest Mining Companies In The World
- 10 Best Long-Term Dividend Stocks to Buy and Hold
- Top 10 Video Gaming Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
