Replimune Group, Inc. (REPL): Hedge Funds Are Reducing Exposure

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Replimune Group, Inc. (NASDAQ:REPL) based on that data.

Replimune Group, Inc. (NASDAQ:REPL) has seen a decrease in enthusiasm from smart money in recent months. REPL was in 8 hedge funds’ portfolios at the end of March. There were 9 hedge funds in our database with REPL holdings at the end of the previous quarter. Our calculations also showed that REPL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most traders, hedge funds are seen as slow, old investment vehicles of years past. While there are more than 8000 funds in operation at present, Our researchers look at the moguls of this group, about 850 funds. These money managers orchestrate most of the hedge fund industry’s total asset base, and by tailing their top investments, Insider Monkey has deciphered a few investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Donald Sussman of Paloma Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to review the key hedge fund action encompassing Replimune Group, Inc. (NASDAQ:REPL).

What does smart money think about Replimune Group, Inc. (NASDAQ:REPL)?

At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the previous quarter. The graph below displays the number of hedge funds with bullish position in REPL over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Redmile Group was the largest shareholder of Replimune Group, Inc. (NASDAQ:REPL), with a stake worth $29.7 million reported as of the end of September. Trailing Redmile Group was Biotechnology Value Fund / BVF Inc, which amassed a stake valued at $19.7 million. Citadel Investment Group, Polar Capital, and Millennium Management 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 Biotechnology Value Fund / BVF Inc allocated the biggest weight to Replimune Group, Inc. (NASDAQ:REPL), around 1.84% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, earmarking 0.83 percent of its 13F equity portfolio to REPL.

Seeing as Replimune Group, Inc. (NASDAQ:REPL) has experienced bearish sentiment from the smart money, it’s safe to say that there was a specific group of hedgies that decided to sell off their positions entirely in the first quarter. Intriguingly, Jim Tananbaum’s Foresite Capital dropped the biggest investment of the 750 funds tracked by Insider Monkey, valued at close to $4.5 million in stock. Donald Sussman’s fund, Paloma Partners, also cut its stock, about $0.3 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds in the first quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Replimune Group, Inc. (NASDAQ:REPL) but similarly valued. We will take a look at Clearwater Paper Corp (NYSE:CLW), American Public Education, Inc. (NASDAQ:APEI), The First Bancshares, Inc. (MS) (NASDAQ:FBMS), and Meridian Bioscience, Inc. (NASDAQ:VIVO). This group of stocks’ market caps are similar to REPL’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $58 million in REPL’s case. Meridian Bioscience, Inc. (NASDAQ:VIVO) is the most popular stock in this table. On the other hand Clearwater Paper Corp (NYSE:CLW) is the least popular one with only 5 bullish hedge fund positions. Replimune Group, Inc. (NASDAQ:REPL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on REPL as the stock returned 107.6% during the second quarter and outperformed the market by an even larger margin.

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