Hedge funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One such potential stock is Juno Therapeutics Inc (NASDAQ:JUNO), so let’s take a closer look at the sentiment that surrounded it heading into the current quarter.
Is Juno Therapeutics Inc (NASDAQ:JUNO) the right investment to pursue these days? Money managers are getting less bullish. The number of long hedge fund positions was cut by 13 recently. At the end of this article we will also compare JUNO to other stocks including United Microelectronics Corp (ADR) (NYSE:UMC), Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), and Biomed Realty Trust Inc (NYSE:BMR) to get a better sense of its popularity.
According to most market participants, hedge funds are viewed as worthless, outdated investment vehicles of the past. While there are greater than 8,000 funds with their doors open at present, Insider Monkey hones in on only the aristocrats of this club, about 700 funds. These investment experts shepherd the bulk of the smart money’s total asset base, and by monitoring their highest performing investments, Insider Monkey has found a few investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in its back tests.
Now, let’s analyze the recent action surrounding Juno Therapeutics Inc (NASDAQ:JUNO).
How have hedgies been trading Juno Therapeutics Inc (NASDAQ:JUNO)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, which was down by 48% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
According to hedge fund intelligence website Insider Monkey, Kris Jenner, Gordon Bussard, and Graham McPhail’s Rock Springs Capital Management has the biggest position in Juno Therapeutics Inc (NASDAQ:JUNO), worth close to $8 million, comprising 0.7% of its total 13F portfolio. The second-largest stake is held by Baker Bros. Advisors, led by Julian Baker and Felix Baker, holding a $3.3 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other peers with similar optimism contain Christopher Medlock James’ Partner Fund Management, Daniel S. Och’s OZ Management, and Ken Griffin’s Citadel Investment Group.
Judging by the fact that Juno Therapeutics Inc (NASDAQ:JUNO) has experienced declining sentiment from the smart money, it’s safe to say that there was a specific group of hedgies who sold off their positions by the end of the third quarter. Interestingly, Peter Kolchinsky’s RA Capital Management dumped the largest stake of all the hedgies followed by Insider Monkey, worth about $14.9 million. James E. Flynn’s fund, Deerfield Management, also dropped its stock, about $9.8 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 13 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to Juno Therapeutics Inc (NASDAQ:JUNO). We will take a look at United Microelectronics Corp (ADR) (NYSE:UMC), Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), Biomed Realty Trust Inc (NYSE:BMR), and American Campus Communities, Inc. (NYSE:ACC). All of these stocks’ market caps match JUNO’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $144 million. Hedge funds in our database had $27.61 million invested in Juno. Biomed Realty Trust Inc (NYSE:BMR) is the most popular stock in this table. On the other hand Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) is the least popular one with only eight bullish hedge fund positions. Juno Therapeutics Inc (NASDAQ:JUNO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on, especially given the limited amount of capital invested in the stock. In this regard BMR might be a better candidate to consider a long position in.