Hedge Funds Are Crazy About Revolution Medicines, Inc. (RVMD)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Revolution Medicines, Inc. (NASDAQ:RVMD).

Is Revolution Medicines, Inc. (NASDAQ:RVMD) the right investment to pursue these days? Investors who are in the know were taking an optimistic view. The number of bullish hedge fund positions advanced by 3 recently. Revolution Medicines, Inc. (NASDAQ:RVMD) was in 29 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RVMD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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

At the end of June, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in RVMD a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Cormorant Asset Management was the largest shareholder of Revolution Medicines, Inc. (NASDAQ:RVMD), with a stake worth $106 million reported as of the end of June. Trailing Cormorant Asset Management was Farallon Capital, which amassed a stake valued at $79.4 million. Biotechnology Value Fund / BVF Inc, Casdin Capital, and Deerfield Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Cormorant Asset Management allocated the biggest weight to Revolution Medicines, Inc. (NASDAQ:RVMD), around 3.6% of its 13F portfolio. Biotechnology Value Fund / BVF Inc is also relatively very bullish on the stock, earmarking 2.96 percent of its 13F equity portfolio to RVMD.

Consequently, specific money managers were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, established the biggest position in Revolution Medicines, Inc. (NASDAQ:RVMD). Point72 Asset Management had $6.1 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $2.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Christiana Goh Bardon’s Burrage Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Mika Toikka’s AlphaCrest Capital Management.

Let’s now review hedge fund activity in other stocks similar to Revolution Medicines, Inc. (NASDAQ:RVMD). We will take a look at Trinseo S.A. (NYSE:TSE), Plains GP Holdings LP (NASDAQ:PAGP), Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA), XPEL Inc. (NASDAQ:XPEL), Washington Federal Inc. (NASDAQ:WAFD), First Financial Bancorp (NASDAQ:FFBC), and Compañía de Minas Buenaventura S.A.A. (NYSE:BVN). This group of stocks’ market valuations are closest to RVMD’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.7 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $485 million in RVMD’s case. XPEL Inc. (NASDAQ:XPEL) is the most popular stock in this table. On the other hand Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Revolution Medicines, Inc. (NASDAQ:RVMD) is more popular among hedge funds. Our overall hedge fund sentiment score for RVMD is 88. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Unfortunately RVMD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on RVMD were disappointed as the stock returned -15.1% since the end of the second quarter (through 10/15) 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 most of these stocks already outperformed the market since 2019.

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