Were These Hedge Funds Right About Dumping Iovance Biotherapeutics, Inc. (IOVA)?

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 second 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 6 years and analyze what the smart money thinks of Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) based on that data.

Is Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) going to take off soon? Money managers were cutting their exposure. The number of bullish hedge fund bets went down by 7 recently. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) was in 30 hedge funds’ portfolios at the end of June. The all time high for this statistic is 43. Our calculations also showed that IOVA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 37 hedge funds in our database with IOVA holdings at the end of March.

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Joseph Edelman of Perceptive Advisors

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 are checking out stock pitches like this emerging lithium stock. 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. 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. Now let’s take a glance at the fresh hedge fund action encompassing Iovance Biotherapeutics, Inc. (NASDAQ:IOVA).

Do Hedge Funds Think IOVA Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from the first quarter of 2020. By comparison, 43 hedge funds held shares or bullish call options in IOVA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, ARK Investment Management held the most valuable stake in Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), which was worth $480.1 million at the end of the second quarter. On the second spot was Perceptive Advisors which amassed $285.2 million worth of shares. Avoro Capital Advisors (venBio Select Advisor), OrbiMed Advisors, and Farallon 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 Frazier Healthcare Partners allocated the biggest weight to Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), around 5.13% of its 13F portfolio. Avoro Capital Advisors (venBio Select Advisor) is also relatively very bullish on the stock, designating 4.12 percent of its 13F equity portfolio to IOVA.

Since Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that slashed their positions entirely heading into Q3. At the top of the heap, Jeffrey Jay and David Kroin’s Great Point Partners said goodbye to the largest stake of all the hedgies watched by Insider Monkey, valued at close to $29.4 million in stock. Mitchell Blutt’s fund, Consonance Capital Management, also dropped its stock, about $25 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 7 funds heading into Q3.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) but similarly valued. These stocks are First Majestic Silver Corp (NYSE:AG), Enable Midstream Partners LP (NYSE:ENBL), Overstock.com, Inc. (NASDAQ:OSTK), ACV Auctions Inc. (NASDAQ:ACVA), Cohen & Steers, Inc. (NYSE:CNS), Jamf Holding Corp. (NASDAQ:JAMF), and loanDepot, Inc. (NYSE:LDI). This group of stocks’ market valuations are closest to IOVA’s market valuation.

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As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $401 million. That figure was $1666 million in IOVA’s case. Overstock.com, Inc. (NASDAQ:OSTK) is the most popular stock in this table. On the other hand Enable Midstream Partners LP (NYSE:ENBL) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is more popular among hedge funds. Our overall hedge fund sentiment score for IOVA is 68.9. 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 29.6% in 2021 through November 5th and still beat the market by 3.1 percentage points. Unfortunately IOVA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IOVA were disappointed as the stock returned -3.9% since the end of the second quarter (through 11/5) 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.

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