Hedge Funds Have Never Been This Bullish On Curis, Inc. (CRIS)

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Curis, Inc. (NASDAQ:CRIS).

Curis, Inc. (NASDAQ:CRIS) was in 29 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 28. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. CRIS investors should pay attention to an increase in hedge fund interest recently. There were 28 hedge funds in our database with CRIS positions at the end of the fourth quarter. Our calculations also showed that CRIS 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, 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. Now we’re going to take a look at the new hedge fund action surrounding Curis, Inc. (NASDAQ:CRIS).

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

At Q1’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in CRIS over the last 23 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

Is CRIS A Good Stock To Buy?

The largest stake in Curis, Inc. (NASDAQ:CRIS) was held by RA Capital Management, which reported holding $80.8 million worth of stock at the end of December. It was followed by Adage Capital Management with a $73.6 million position. Other investors bullish on the company included Point72 Asset Management, Sio Capital, and OrbiMed Advisors. In terms of the portfolio weights assigned to each position Sio Capital allocated the biggest weight to Curis, Inc. (NASDAQ:CRIS), around 10.07% of its 13F portfolio. Octagon Capital Advisors is also relatively very bullish on the stock, dishing out 9.08 percent of its 13F equity portfolio to CRIS.

As industrywide interest jumped, key money managers have been driving this bullishness. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, established the most outsized position in Curis, Inc. (NASDAQ:CRIS). Polar Capital had $17 million invested in the company at the end of the quarter. Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund also initiated a $10 million position during the quarter. The following funds were also among the new CRIS investors: Steve Cohen’s Point72 Asset Management, Hal Mintz’s Sabby Capital, and Andre F. Perold’s HighVista Strategies.

Let’s also examine hedge fund activity in other stocks similar to Curis, Inc. (NASDAQ:CRIS). These stocks are John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), Scholastic Corp (NASDAQ:SCHL), Vine Energy Inc. (NYSE:VEI), EverQuote, Inc. (NASDAQ:EVER), Veeco Instruments Inc. (NASDAQ:VECO), SFL Corporation Ltd. (NYSE:SFL), and Humanigen, Inc. (NASDAQ:HGEN). This group of stocks’ market valuations match CRIS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
JBSS 10 84672 0
SCHL 9 26175 -2
VEI 16 152344 16
EVER 19 135053 1
VECO 20 381940 1
SFL 14 25172 0
HGEN 11 220502 6
Average 14.1 146551 3.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.1 hedge funds with bullish positions and the average amount invested in these stocks was $147 million. That figure was $493 million in CRIS’s case. Veeco Instruments Inc. (NASDAQ:VECO) is the most popular stock in this table. On the other hand Scholastic Corp (NASDAQ:SCHL) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Curis, Inc. (NASDAQ:CRIS) is more popular among hedge funds. Our overall hedge fund sentiment score for CRIS 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. 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Unfortunately CRIS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CRIS were disappointed as the stock returned -32.2% since the end of the first quarter (through 7/2) 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.