The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thought Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) has seen a decrease in enthusiasm from smart money in recent months. YMAB was in 11 hedge funds’ portfolios at the end of the first quarter of 2020. There were 12 hedge funds in our database with YMAB holdings at the end of the previous quarter. Our calculations also showed that YMAB 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.
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Richard Driehaus of Driehaus Capital
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 we’re going to analyze the key hedge fund action surrounding Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB).
What does smart money think about Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB)?
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in YMAB a year ago. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
The largest stake in Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) was held by Cormorant Asset Management, which reported holding $45.2 million worth of stock at the end of September. It was followed by Perceptive Advisors with a $12.1 million position. Other investors bullish on the company included Driehaus Capital, Polar Capital, and Sphera Global Healthcare Fund. In terms of the portfolio weights assigned to each position Burrage Capital Management allocated the biggest weight to Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), around 4.34% of its 13F portfolio. Cormorant Asset Management is also relatively very bullish on the stock, dishing out 2.1 percent of its 13F equity portfolio to YMAB.
Judging by the fact that Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) has experienced bearish sentiment from hedge fund managers, logic holds that there were a few hedgies who were dropping their entire stakes last quarter. Intriguingly, Julian Baker and Felix Baker’s Baker Bros. Advisors said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, worth close to $4.3 million in stock. Renaissance Technologies, also said goodbye to its stock, about $0.8 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB). These stocks are Fangdd Network Group Ltd. (NASDAQ:DUO), Middlesex Water Company (NASDAQ:MSEX), Avis Budget Group Inc. (NASDAQ:CAR), and Gentherm Inc (NASDAQ:THRM). This group of stocks’ market valuations match YMAB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DUO | 1 | 413 | 0 |
| MSEX | 7 | 49591 | -2 |
| CAR | 23 | 475620 | -4 |
| THRM | 11 | 54847 | -6 |
| Average | 10.5 | 145118 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $145 million. That figure was $99 million in YMAB’s case. Avis Budget Group Inc. (NASDAQ:CAR) is the most popular stock in this table. On the other hand Fangdd Network Group Ltd. (NASDAQ:DUO) is the least popular one with only 1 bullish hedge fund positions. Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) 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 YMAB as the stock returned 65.5% 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.
