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Hedge Funds Are Selling Marker Therapeutics, Inc. (MRKR)

Looking for stocks with high upside potential? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 20% in 2019 (through September 30th). Conversely, hedge funds’ 20 preferred S&P 500 stocks generated a return of 24% during the same period, with the majority of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds’ consensus stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Marker Therapeutics, Inc. (NASDAQ:MRKR).

Marker Therapeutics, Inc. (NASDAQ:MRKR) was in 9 hedge funds’ portfolios at the end of the second quarter of 2019. MRKR investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. There were 10 hedge funds in our database with MRKR holdings at the end of the previous quarter. Our calculations also showed that MRKR isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

MRKR_oct2019

In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources  like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. We’re going to review the fresh hedge fund action encompassing Marker Therapeutics, Inc. (NASDAQ:MRKR).

How are hedge funds trading Marker Therapeutics, Inc. (NASDAQ:MRKR)?

At Q2’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in MRKR a year ago. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

Felix Baker - Baker Bros.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Perceptive Advisors, managed by Joseph Edelman, holds the largest position in Marker Therapeutics, Inc. (NASDAQ:MRKR). Perceptive Advisors has a $15.8 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is Baker Bros. Advisors, managed by Julian Baker and Felix Baker, which holds a $11.9 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism consist of Ari Zweiman’s 683 Capital Partners, John Osterweis’s Osterweis Capital Management and Dmitry Balyasny’s Balyasny Asset Management.

Seeing as Marker Therapeutics, Inc. (NASDAQ:MRKR) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds who sold off their positions entirely in the second quarter. Interestingly, Benjamin A. Smith’s Laurion Capital Management cut the largest position of the 750 funds tracked by Insider Monkey, worth an estimated $1.4 million in stock. Israel Englander’s fund, Millennium Management, also cut its stock, about $1.2 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 1 funds in the second quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Marker Therapeutics, Inc. (NASDAQ:MRKR) but similarly valued. We will take a look at Oppenheimer Holdings Inc. (NYSE:OPY), Greenlane Holdings, Inc. (NASDAQ:GNLN), Calix Inc (NYSE:CALX), and Miller Industries, Inc. (NYSE:MLR). This group of stocks’ market values resemble MRKR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OPY 9 36092 0
GNLN 6 21145 6
CALX 14 93596 -3
MLR 8 51586 0
Average 9.25 50605 0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $35 million in MRKR’s case. Calix Inc (NYSE:CALX) is the most popular stock in this table. On the other hand Greenlane Holdings, Inc. (NASDAQ:GNLN) is the least popular one with only 6 bullish hedge fund positions. Marker Therapeutics, Inc. (NASDAQ:MRKR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately MRKR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); MRKR investors were disappointed as the stock returned -35.5% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

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

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