Here is What Hedge Funds Think About UroGen Pharma Ltd. (URGN)

In this article we are going to use hedge fund sentiment as a tool and determine whether UroGen Pharma Ltd. (NASDAQ:URGN) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Hedge fund interest in UroGen Pharma Ltd. (NASDAQ:URGN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that URGN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare URGN to other stocks including Astronics Corporation (NASDAQ:ATRO), Spero Therapeutics, Inc. (NASDAQ:SPRO), and China Online Education Group (NYSE:COE) to get a better sense of its popularity.

According to most shareholders, hedge funds are viewed as unimportant, outdated financial vehicles of years past. While there are more than 8000 funds with their doors open at present, We choose to focus on the elite of this group, approximately 850 funds. These investment experts orchestrate the lion’s share of the hedge fund industry’s total capital, and by watching their finest stock picks, Insider Monkey has brought to light a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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 review the new hedge fund action surrounding UroGen Pharma Ltd. (NASDAQ:URGN).

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

At the end of March, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards URGN over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Wildcat Capital Management held the most valuable stake in UroGen Pharma Ltd. (NASDAQ:URGN), which was worth $10.4 million at the end of the fourth quarter. On the second spot was ARK Investment Management which amassed $5.7 million worth of shares. Millennium Management, Citadel Investment Group, and Citadel Investment Group 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 Wildcat Capital Management allocated the biggest weight to UroGen Pharma Ltd. (NASDAQ:URGN), around 1.27% of its 13F portfolio. Algert Global is also relatively very bullish on the stock, dishing out 0.07 percent of its 13F equity portfolio to URGN.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as UroGen Pharma Ltd. (NASDAQ:URGN) but similarly valued. These stocks are Astronics Corporation (NASDAQ:ATRO), Spero Therapeutics, Inc. (NASDAQ:SPRO), China Online Education Group (NYSE:COE), Verona Pharma plc (NASDAQ:VRNA), Hooker Furniture Corporation (NASDAQ:HOFT), BeyondSpring, Inc. (NASDAQ:BYSI), and Phoenix Tree Holdings Limited (NYSE:DNK). This group of stocks’ market caps match URGN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.7 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $19 million in URGN’s case. Astronics Corporation (NASDAQ:ATRO) is the most popular stock in this table. On the other hand China Online Education Group (NYSE:COE) is the least popular one with only 3 bullish hedge fund positions. UroGen Pharma Ltd. (NASDAQ:URGN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for URGN is 26.3. 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 negative signal and 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 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately URGN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); URGN investors were disappointed as the stock returned -13% since the end of March (through 6/25) 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 in 2021.

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