We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 835 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2019. What do these smart investors think about IGM Biosciences, Inc. (NASDAQ:IGMS)?
IGM Biosciences, Inc. (NASDAQ:IGMS) was in 12 hedge funds’ portfolios at the end of December. IGMS shareholders have witnessed an increase in hedge fund sentiment of late. There were 11 hedge funds in our database with IGMS holdings at the end of the previous quarter. Our calculations also showed that IGMS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
Peter Kolchinsky of RA Capital Management
We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader’s corona catalyst trades. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the fresh hedge fund action regarding IGM Biosciences, Inc. (NASDAQ:IGMS).
How have hedgies been trading IGM Biosciences, Inc. (NASDAQ:IGMS)?
At Q4’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in IGMS a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Baker Bros. Advisors was the largest shareholder of IGM Biosciences, Inc. (NASDAQ:IGMS), with a stake worth $120 million reported as of the end of September. Trailing Baker Bros. Advisors was Redmile Group, which amassed a stake valued at $120 million. RA Capital Management, Hillhouse Capital Management, and Vivo Capital 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 Redmile Group allocated the biggest weight to IGM Biosciences, Inc. (NASDAQ:IGMS), around 2.87% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, earmarking 1.14 percent of its 13F equity portfolio to IGMS.
With a general bullishness amongst the heavyweights, some big names have jumped into IGM Biosciences, Inc. (NASDAQ:IGMS) headfirst. Logos Capital, managed by Arsani William, established the biggest position in IGM Biosciences, Inc. (NASDAQ:IGMS). Logos Capital had $4.4 million invested in the company at the end of the quarter. Kamran Moghtaderi’s Eversept Partners also initiated a $2.5 million position during the quarter. The other funds with brand new IGMS positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s check out hedge fund activity in other stocks similar to IGM Biosciences, Inc. (NASDAQ:IGMS). These stocks are Oi SA (NYSE:OIBR), Franks International NV (NYSE:FI), Orion Engineered Carbons SA (NYSE:OEC), and The Chefs Warehouse, Inc (NASDAQ:CHEF). This group of stocks’ market valuations resemble IGMS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OIBR | 12 | 191854 | 1 |
| FI | 10 | 21471 | -1 |
| OEC | 18 | 227067 | -2 |
| CHEF | 7 | 55689 | -3 |
| Average | 11.75 | 124020 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $320 million in IGMS’s case. Orion Engineered Carbons SA (NYSE:OEC) is the most popular stock in this table. On the other hand The Chefs Warehouse, Inc (NASDAQ:CHEF) is the least popular one with only 7 bullish hedge fund positions. IGM Biosciences, Inc. (NASDAQ:IGMS) 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 1.0% in 2020 through May 1st but still beat the market by 12.9 percentage points. Hedge funds were also right about betting on IGMS as the stock returned 42.6% in 2020 (through May 1st) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
