At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not ProQR Therapeutics NV (NASDAQ:PRQR) makes for a good investment right now.
ProQR Therapeutics NV (NASDAQ:PRQR) has seen an increase in activity from the world’s largest hedge funds of late. ProQR Therapeutics NV (NASDAQ:PRQR) was in 18 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PRQR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Peter Kolchinsky of RA Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Keeping this in mind we’re going to take a look at the key hedge fund action regarding ProQR Therapeutics NV (NASDAQ:PRQR).
Do Hedge Funds Think PRQR Is A Good Stock To Buy Now?
At first quarter’s end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from one quarter earlier. On the other hand, there were a total of 8 hedge funds with a bullish position in PRQR a year ago. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in ProQR Therapeutics NV (NASDAQ:PRQR) was held by Adage Capital Management, which reported holding $31 million worth of stock at the end of December. It was followed by Driehaus Capital with a $14 million position. Other investors bullish on the company included RA Capital Management, Point72 Asset Management, and Opaleye Management. In terms of the portfolio weights assigned to each position Prosight Capital allocated the biggest weight to ProQR Therapeutics NV (NASDAQ:PRQR), around 2.44% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, designating 1.73 percent of its 13F equity portfolio to PRQR.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, established the biggest position in ProQR Therapeutics NV (NASDAQ:PRQR). Driehaus Capital had $14 million invested in the company at the end of the quarter. Peter Kolchinsky’s RA Capital Management also initiated a $14 million position during the quarter. The following funds were also among the new PRQR investors: Steve Cohen’s Point72 Asset Management, James A. Silverman’s Opaleye Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ProQR Therapeutics NV (NASDAQ:PRQR) but similarly valued. We will take a look at NantHealth, Inc. (NASDAQ:NH), Oncorus, Inc. (NASDAQ:ONCR), Team, Inc. (NYSE:TISI), Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), América Móvil, S.A.B. de C.V. (NYSE:AMOV), Primis Financial Corp. (NASDAQ:FRST), and Experience Investment Corp. (NASDAQ:EXPC). All of these stocks’ market caps match PRQR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NH | 3 | 467 | -3 |
| ONCR | 14 | 133011 | 5 |
| TISI | 11 | 77067 | -2 |
| SMBC | 3 | 12940 | -1 |
| AMOV | 1 | 235 | 0 |
| FRST | 8 | 15760 | -3 |
| EXPC | 7 | 33390 | -11 |
| Average | 6.7 | 38981 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $101 million in PRQR’s case. Oncorus, Inc. (NASDAQ:ONCR) is the most popular stock in this table. On the other hand América Móvil, S.A.B. de C.V. (NYSE:AMOV) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks ProQR Therapeutics NV (NASDAQ:PRQR) is more popular among hedge funds. Our overall hedge fund sentiment score for PRQR is 90. 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. 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 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Unfortunately PRQR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PRQR were disappointed as the stock returned -16.9% since the end of the first quarter (through 7/23) 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 most of these stocks already outperformed the market since 2019.
Follow Proqr Therapeutics N.v. (NASDAQ:PRQR)
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Disclosure: None. This article was originally published at Insider Monkey.
