Hedge Funds Are Selling Immunomedics, Inc. (IMMU)

The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Immunomedics, Inc. (NASDAQ:IMMU) based on those filings.

Immunomedics, Inc. (NASDAQ:IMMU) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. IMMU was in 30 hedge funds’ portfolios at the end of the third quarter of 2018. There were 33 hedge funds in our database with IMMU holdings at the end of the previous quarter. Our calculations also showed that IMMU isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Samuel Isaly Orbimed Advisors

Let’s take a peek at the key hedge fund action surrounding Immunomedics, Inc. (NASDAQ:IMMU).

How are hedge funds trading Immunomedics, Inc. (NASDAQ:IMMU)?

At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the second quarter of 2018. On the other hand, there were a total of 26 hedge funds with a bullish position in IMMU at the beginning of this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

No of Hedge Funds with IMMU Positions

The largest stake in Immunomedics, Inc. (NASDAQ:IMMU) was held by venBio Select Advisor, which reported holding $369 million worth of stock at the end of September. It was followed by Palo Alto Investors with a $104.4 million position. Other investors bullish on the company included OrbiMed Advisors, RA Capital Management, and Foresite Capital.

Judging by the fact that Immunomedics, Inc. (NASDAQ:IMMU) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there exists a select few fund managers that slashed their entire stakes last quarter. At the top of the heap, Leon Cooperman’s Omega Advisors sold off the biggest investment of all the hedgies watched by Insider Monkey, comprising an estimated $9.5 million in stock, and Thomas Steyer’s Farallon Capital was right behind this move, as the fund dropped about $9.5 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Immunomedics, Inc. (NASDAQ:IMMU) but similarly valued. We will take a look at Virtu Financial Inc (NASDAQ:VIRT), Hawaiian Electric Industries, Inc. (NYSE:HE), MB Financial, Inc. (NASDAQ:MBFI), and Ryder System, Inc. (NYSE:R). This group of stocks’ market valuations are similar to IMMU’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VIRT 14 72947 -6
HE 11 117755 1
MBFI 13 237887 -3
R 23 383351 6
Average 15.25 202985 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $203 million. That figure was $945 million in IMMU’s case. Ryder System, Inc. (NYSE:R) is the most popular stock in this table. On the other hand Hawaiian Electric Industries, Inc. (NYSE:HE) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Immunomedics, Inc. (NASDAQ:IMMU) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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