Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Kura Oncology, Inc. (NASDAQ:KURA) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Is Kura Oncology, Inc. (NASDAQ:KURA) going to take off soon? Money managers were taking a pessimistic view. The number of bullish hedge fund bets retreated by 3 in recent months. Kura Oncology, Inc. (NASDAQ:KURA) was in 35 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that KURA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Oleg Nodelman of EcoR1 Capital
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 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. With all of this in mind we’re going to take a look at the latest hedge fund action regarding Kura Oncology, Inc. (NASDAQ:KURA).
Do Hedge Funds Think KURA Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in KURA over the last 25 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Kura Oncology, Inc. (NASDAQ:KURA) was held by Avoro Capital Advisors (venBio Select Advisor), which reported holding $74.9 million worth of stock at the end of September. It was followed by EcoR1 Capital with a $69.8 million position. Other investors bullish on the company included Holocene Advisors, Suvretta Capital Management, and Deerfield Management. In terms of the portfolio weights assigned to each position Commodore Capital allocated the biggest weight to Kura Oncology, Inc. (NASDAQ:KURA), around 4.94% of its 13F portfolio. EcoR1 Capital is also relatively very bullish on the stock, dishing out 2.43 percent of its 13F equity portfolio to KURA.
Due to the fact that Kura Oncology, Inc. (NASDAQ:KURA) has witnessed bearish sentiment from the smart money, we can see that there lies a certain “tier” of funds that elected to cut their full holdings last quarter. Interestingly, Lei Zhang’s Hillhouse Capital Management cut the biggest investment of all the hedgies tracked by Insider Monkey, valued at close to $13.6 million in stock, and Jeffrey Jay and David Kroin’s Great Point Partners was right behind this move, as the fund dropped about $10.4 million worth. These transactions are interesting, as total hedge fund interest fell by 3 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Kura Oncology, Inc. (NASDAQ:KURA) but similarly valued. These stocks are Vine Energy Inc. (NYSE:VEI), The Chefs Warehouse, Inc (NASDAQ:CHEF), Radius Global Infrastructure, Inc. (NASDAQ:RADI), Genetron Holdings Limited (NASDAQ:GTH), MaxCyte Inc. (NASDAQ:MXCT), Coherus Biosciences Inc (NASDAQ:CHRS), and Scholastic Corp (NASDAQ:SCHL). This group of stocks’ market values match KURA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VEI | 19 | 92210 | 6 |
| CHEF | 13 | 102969 | 2 |
| RADI | 23 | 375690 | 3 |
| GTH | 7 | 116922 | -7 |
| MXCT | 17 | 346202 | 17 |
| CHRS | 18 | 123722 | 1 |
| SCHL | 13 | 47533 | 0 |
| Average | 15.7 | 172178 | 3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.7 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $451 million in KURA’s case. Radius Global Infrastructure, Inc. (NASDAQ:RADI) is the most popular stock in this table. On the other hand Genetron Holdings Limited (NASDAQ:GTH) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Kura Oncology, Inc. (NASDAQ:KURA) is more popular among hedge funds. Our overall hedge fund sentiment score for KURA is 76.4. 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 and still beat the market by 3.6 percentage points. Unfortunately, KURA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on KURA were disappointed as the stock returned -24.8% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Kura Oncology Inc. (NASDAQ:KURA)
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Disclosure: None. This article was originally published at Insider Monkey.
