Where Do Hedge Funds Stand On Merus N.V. (MRUS)?

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 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 30th, 2021. In this article we are going to take a look at smart money sentiment towards Merus N.V. (NASDAQ:MRUS).

Hedge fund interest in Merus N.V. (NASDAQ:MRUS) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MRUS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare MRUS to other stocks including BioXcel Therapeutics, Inc. (NASDAQ:BTAI), Amerant Bancorp Inc. (NASDAQ:AMTB), and Chico’s FAS, Inc. (NYSE:CHS) to get a better sense of its popularity.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Felix Baker of Baker Bros.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, 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. Keeping this in mind let’s check out the fresh hedge fund action regarding Merus N.V. (NASDAQ:MRUS).

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

At second quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in MRUS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Merus N.V. (NASDAQ:MRUS) was held by Biotechnology Value Fund / BVF Inc, which reported holding $153.5 million worth of stock at the end of June. It was followed by Baker Bros. Advisors with a $42.9 million position. Other investors bullish on the company included Driehaus Capital, Avoro Capital Advisors (venBio Select Advisor), and Vivo Capital. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Merus N.V. (NASDAQ:MRUS), around 5.75% of its 13F portfolio. SilverArc Capital is also relatively very bullish on the stock, earmarking 3.01 percent of its 13F equity portfolio to MRUS.

Because Merus N.V. (NASDAQ:MRUS) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers who sold off their entire stakes heading into Q3. It’s worth mentioning that Lei Zhang’s Hillhouse Capital Management dropped the largest stake of the 750 funds tracked by Insider Monkey, valued at about $1 million in stock. Parvinder Thiara’s fund, Athanor Capital, also said goodbye to its stock, about $0.7 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Merus N.V. (NASDAQ:MRUS) but similarly valued. We will take a look at BioXcel Therapeutics, Inc. (NASDAQ:BTAI), Amerant Bancorp Inc. (NASDAQ:AMTB), Chico’s FAS, Inc. (NYSE:CHS), HarborOne Bancorp, Inc. (NASDAQ:HONE), Citi Trends, Inc. (NASDAQ:CTRN), Clarus Corporation (NASDAQ:CLAR), and Luokung Technology Corp (NASDAQ:LKCO). This group of stocks’ market valuations resemble MRUS’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $309 million in MRUS’s case. Citi Trends, Inc. (NASDAQ:CTRN) is the most popular stock in this table. On the other hand Luokung Technology Corp (NASDAQ:LKCO) is the least popular one with only 1 bullish hedge fund positions. Merus N.V. (NASDAQ:MRUS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MRUS is 80.8. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on MRUS as the stock returned 34.6% since the end of Q2 (through 10/22) 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.