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How Did Uniqure NV (QURE) Compare Against Hedge Fund Darlings in 2019?

We are still in an overall bull market and many stocks that smart money investors were piling into surged in 2019. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained more than 57% each. Hedge funds’ top 3 stock picks returned 44.6% this year and beat the S&P 500 ETFs by almost 14 percentage points. That’s a big deal. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.

Is Uniqure NV (NASDAQ:QURE) worth your attention right now? Money managers are buying. The number of bullish hedge fund positions increased by 4 recently. Our calculations also showed that QURE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings). QURE was in 38 hedge funds’ portfolios at the end of September. There were 34 hedge funds in our database with QURE positions at the end of the previous quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

MOORE GLOBAL INVESTMENTS

Louis Bacon Moore of Moore Capital

We leave no stone unturned when looking for the next great investment idea. For example one of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock is still extremely cheap despite already gaining 20 percent. With all of this in mind we’re going to take a glance at the latest hedge fund action surrounding Uniqure NV (NASDAQ:QURE).

What have hedge funds been doing with Uniqure NV (NASDAQ:QURE)?

At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards QURE over the last 17 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

More specifically, Redmile Group was the largest shareholder of Uniqure NV (NASDAQ:QURE), with a stake worth $94.9 million reported as of the end of September. Trailing Redmile Group was Nantahala Capital Management, which amassed a stake valued at $77.5 million. Consonance Capital Management, Partner Fund Management, and Cormorant Asset Management 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 Aquilo Capital Management allocated the biggest weight to Uniqure NV (NASDAQ:QURE), around 10.84% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, earmarking 7.18 percent of its 13F equity portfolio to QURE.

As aggregate interest increased, key hedge funds were breaking ground themselves. Aquilo Capital Management, managed by Marc Schneidman, initiated the most valuable call position in Uniqure NV (NASDAQ:QURE). Aquilo Capital Management had $15.7 million invested in the company at the end of the quarter. Behzad Aghazadeh’s venBio Select Advisor also made a $14.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management, and Louis Bacon’s Moore Global Investments.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Uniqure NV (NASDAQ:QURE) but similarly valued. We will take a look at Yunji Inc. (NASDAQ:YJ), American Finance Trust, Inc. (NASDAQ:AFIN), Plantronics, Inc. (NYSE:PLT), and Heron Therapeutics Inc (NASDAQ:HRTX). All of these stocks’ market caps resemble QURE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
YJ 3 5331 -1
AFIN 8 11654 4
PLT 11 97331 -7
HRTX 15 372665 -3
Average 9.25 121745 -1.75

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 $122 million. That figure was $538 million in QURE’s case. Heron Therapeutics Inc (NASDAQ:HRTX) is the most popular stock in this table. On the other hand Yunji Inc. (NASDAQ:YJ) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Uniqure NV (NASDAQ:QURE) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.1% in 2019 through December 23rd and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. Hedge funds were also right about betting on QURE as the stock returned 149.2% so far in 2019 (through 12/23) 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.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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

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