Hedge Funds Are Crazy About ImmunoGen, Inc. (IMGN)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded ImmunoGen, Inc. (NASDAQ:IMGN) based on those filings.

ImmunoGen, Inc. (NASDAQ:IMGN) shareholders have witnessed an increase in enthusiasm from smart money of late. ImmunoGen, Inc. (NASDAQ:IMGN) was in 26 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMGN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Peter Kolchinsky of RA Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. With all of this in mind we’re going to review the key hedge fund action surrounding ImmunoGen, Inc. (NASDAQ:IMGN).

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

At Q1’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in IMGN a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in ImmunoGen, Inc. (NASDAQ:IMGN) was held by RA Capital Management, which reported holding $149.2 million worth of stock at the end of December. It was followed by Redmile Group with a $78.5 million position. Other investors bullish on the company included OrbiMed Advisors, Adage Capital Management, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position SilverArc Capital allocated the biggest weight to ImmunoGen, Inc. (NASDAQ:IMGN), around 3.22% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, setting aside 2.25 percent of its 13F equity portfolio to IMGN.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Rhenman & Partners Asset Management, managed by Henrik Rhenman, assembled the most valuable position in ImmunoGen, Inc. (NASDAQ:IMGN). Rhenman & Partners Asset Management had $4.5 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.6 million investment in the stock during the quarter. The following funds were also among the new IMGN investors: Israel Englander’s Millennium Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Matthew L Pinz’s Pinz Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ImmunoGen, Inc. (NASDAQ:IMGN) but similarly valued. We will take a look at BrightSphere Investment Group Inc (NYSE:BSIG), New Frontier Health Corporation (NYSE:NFH), Veritex Holdings Inc (NASDAQ:VBTX), YPF Sociedad Anonima (NYSE:YPF), Methode Electronics Inc. (NYSE:MEI), Delek US Holdings, Inc. (NYSE:DK), and Design Therapeutics, Inc. (NASDAQ:DSGN). All of these stocks’ market caps are similar to IMGN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BSIG 26 642021 0
NFH 13 310954 1
VBTX 6 38738 -1
YPF 8 9228 2
MEI 13 80123 2
DK 13 305089 -4
DSGN 15 543833 15
Average 13.4 275712 2.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $276 million. That figure was $458 million in IMGN’s case. BrightSphere Investment Group Inc (NYSE:BSIG) is the most popular stock in this table. On the other hand Veritex Holdings Inc (NASDAQ:VBTX) is the least popular one with only 6 bullish hedge fund positions. ImmunoGen, Inc. (NASDAQ:IMGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IMGN is 86. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 July 9th and beat the market again by 6.7 percentage points. Unfortunately IMGN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IMGN were disappointed as the stock returned -21.5% since the end of March (through 7/9) 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 many of these stocks already outperformed the market since 2019.

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