Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) based on that data and determine whether they were really smart about the stock.
Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of the first quarter of 2020. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as YRC Worldwide, Inc. (NASDAQ:YRCW), FFBW, Inc. (NASDAQ:FFBW), and Otonomy Inc (NASDAQ:OTIC) to gather more data points. Our calculations also showed that CRVS 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Samuel Isaly of OrbiMed Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. 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. Now let’s go over the latest hedge fund action surrounding Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS).
What have hedge funds been doing with Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS)?
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CRVS over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Samuel Isaly’s OrbiMed Advisors has the largest position in Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), worth close to $14.3 million, amounting to 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Adams Street Partners, led by Jeffrey Diehl, holding a $6.9 million position; 1.7% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions consist of Mark Lampert’s Biotechnology Value Fund / BVF Inc, Israel Englander’s Millennium Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Adams Street Partners allocated the biggest weight to Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), around 1.72% of its 13F portfolio. Puissance Capital Managementá is also relatively very bullish on the stock, setting aside 0.93 percent of its 13F equity portfolio to CRVS.
Because Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there were a few money managers who were dropping their full holdings last quarter. Interestingly, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management cut the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $0.8 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund said goodbye to about $0.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS). These stocks are YRC Worldwide, Inc. (NASDAQ:YRCW), FFBW, Inc. (NASDAQ:FFBW), Otonomy Inc (NASDAQ:OTIC), and Lincoln Educational Services Corporation (NASDAQ:LINC). This group of stocks’ market caps are similar to CRVS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YRCW | 5 | 1041 | -1 |
| FFBW | 2 | 2359 | 1 |
| OTIC | 13 | 14343 | 1 |
| LINC | 6 | 20234 | 0 |
| Average | 6.5 | 9494 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $32 million in CRVS’s case. Otonomy Inc (NASDAQ:OTIC) is the most popular stock in this table. On the other hand FFBW, Inc. (NASDAQ:FFBW) is the least popular one with only 2 bullish hedge fund positions. Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) is not the most popular stock in this group but hedge fund interest is still above 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 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on CRVS as the stock returned 28.9% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
