With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was RAPT Therapeutics, Inc. (NASDAQ:RAPT).
RAPT Therapeutics, Inc. (NASDAQ:RAPT) investors should pay attention to an increase in enthusiasm from smart money lately. RAPT Therapeutics, Inc. (NASDAQ:RAPT) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 13 hedge funds in our database with RAPT holdings at the end of March. Our calculations also showed that RAPT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Jim Simons of Renaissance Technologies
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 view the fresh hedge fund action regarding RAPT Therapeutics, Inc. (NASDAQ:RAPT).
Do Hedge Funds Think RAPT Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 62% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards RAPT over the last 24 quarters. 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 RAPT Therapeutics, Inc. (NASDAQ:RAPT) was held by Perceptive Advisors, which reported holding $78.7 million worth of stock at the end of June. It was followed by Kingdon Capital with a $24.5 million position. Other investors bullish on the company included Logos Capital, Euclidean Capital, and Ghost Tree Capital. In terms of the portfolio weights assigned to each position Euclidean Capital allocated the biggest weight to RAPT Therapeutics, Inc. (NASDAQ:RAPT), around 5.47% of its 13F portfolio. Ghost Tree Capital is also relatively very bullish on the stock, dishing out 4.98 percent of its 13F equity portfolio to RAPT.
Consequently, specific money managers have been driving this bullishness. Logos Capital, managed by Arsani William, established the most valuable call position in RAPT Therapeutics, Inc. (NASDAQ:RAPT). Logos Capital had $23.8 million invested in the company at the end of the quarter. Ken Greenberg and David Kim’s Ghost Tree Capital also made a $18.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Arsani William’s Logos Capital, Matthew L Pinz’s Pinz Capital, and Arthur B Cohen and Joseph Healey’s Healthcor Management LP.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as RAPT Therapeutics, Inc. (NASDAQ:RAPT) but similarly valued. These stocks are Innoviva, Inc. (NASDAQ:INVA), Eos Energy Enterprises, Inc. (NASDAQ:EOSE), Avidity Biosciences, Inc. (NASDAQ:RNA), DRDGOLD Ltd. (NYSE:DRD), PBF Logistics LP (NYSE:PBFX), Despegar.com, Corp. (NYSE:DESP), and Omeros Corporation (NASDAQ:OMER). All of these stocks’ market caps match RAPT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INVA | 14 | 211973 | -1 |
| EOSE | 7 | 11761 | -4 |
| RNA | 16 | 243882 | 1 |
| DRD | 5 | 19439 | 0 |
| PBFX | 4 | 1895 | 1 |
| DESP | 22 | 212038 | 4 |
| OMER | 11 | 72648 | -1 |
| Average | 11.3 | 110519 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.3 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $206 million in RAPT’s case. Despegar.com, Corp. (NYSE:DESP) is the most popular stock in this table. On the other hand PBF Logistics LP (NYSE:PBFX) is the least popular one with only 4 bullish hedge fund positions. RAPT Therapeutics, Inc. (NASDAQ:RAPT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RAPT is 87.2. 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 October 22nd and beat the market again by 1.6 percentage points. Unfortunately RAPT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on RAPT were disappointed as the stock returned 0.4% since the end of June (through 10/22) 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.
Follow Rapt Therapeutics Inc. (NASDAQ:RAPT)
Follow Rapt Therapeutics Inc. (NASDAQ:RAPT)
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Disclosure: None. This article was originally published at Insider Monkey.
