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Hedge Funds Have Never Been This Bullish On Trillium Therapeutics Inc. (TRIL)

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Trillium Therapeutics Inc. (NASDAQ:TRIL) based on that data.

Trillium Therapeutics Inc. (NASDAQ:TRIL) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. Our calculations also showed that TRIL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Peter Kolchinsky of RA Capital Management

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to view the fresh hedge fund action encompassing Trillium Therapeutics Inc. (NASDAQ:TRIL).

What does smart money think about Trillium Therapeutics Inc. (NASDAQ:TRIL)?

At Q1’s end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 733% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TRIL over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, RA Capital Management was the largest shareholder of Trillium Therapeutics Inc. (NASDAQ:TRIL), with a stake worth $25.7 million reported as of the end of September. Trailing RA Capital Management was Avoro Capital Advisors (venBio Select Advisor), which amassed a stake valued at $20 million. Citadel Investment Group, Frazier Healthcare Partners, and Vivo Capital 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 Logos Capital allocated the biggest weight to Trillium Therapeutics Inc. (NASDAQ:TRIL), around 1.53% of its 13F portfolio. Frazier Healthcare Partners is also relatively very bullish on the stock, designating 1.08 percent of its 13F equity portfolio to TRIL.

As aggregate interest increased, specific money managers were breaking ground themselves. RA Capital Management, managed by Peter Kolchinsky, assembled the largest position in Trillium Therapeutics Inc. (NASDAQ:TRIL). RA Capital Management had $25.7 million invested in the company at the end of the quarter. Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor) also initiated a $20 million position during the quarter. The other funds with brand new TRIL positions are Ken Griffin’s Citadel Investment Group, Alan Frazier’s Frazier Healthcare Partners, and Albert Cha and Frank Kung’s Vivo Capital.

Let’s now review hedge fund activity in other stocks similar to Trillium Therapeutics Inc. (NASDAQ:TRIL). We will take a look at dMY Technology Group, Inc. (NYSE:DMYT), One Liberty Properties, Inc. (NYSE:OLP), Granite Point Mortgage Trust Inc. (NYSE:GPMT), and South Plains Financial, Inc. (NASDAQ:SPFI). This group of stocks’ market caps match TRIL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DMYT 21 101818 21
OLP 6 17617 1
GPMT 11 14191 2
SPFI 3 3894 -1
Average 10.25 34380 5.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $122 million in TRIL’s case. dMY Technology Group, Inc. (NYSE:DMYT) is the most popular stock in this table. On the other hand South Plains Financial, Inc. (NASDAQ:SPFI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Trillium Therapeutics Inc. (NASDAQ:TRIL) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on TRIL as the stock returned 95.5% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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