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Is Affimed NV (AFMD) Going to Burn These Hedge Funds?

After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Affimed NV (NASDAQ:AFMD).

Is Affimed NV (NASDAQ:AFMD) the right pick for your portfolio? The best stock pickers are buying. The number of bullish hedge fund bets rose by 1 in recent months. Our calculations also showed that AFMD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
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 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

AQR CAPITAL MANAGEMENT

Cliff Asness of AQR Capital Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the recent hedge fund action surrounding Affimed NV (NASDAQ:AFMD).

What have hedge funds been doing with Affimed NV (NASDAQ:AFMD)?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AFMD over the last 17 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, Millennium Management held the most valuable stake in Affimed NV (NASDAQ:AFMD), which was worth $11.7 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $2.6 million worth of shares. Point72 Asset Management, 683 Capital Partners, and Eversept Partners 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 Eversept Partners allocated the biggest weight to Affimed NV (NASDAQ:AFMD), around 0.3% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to AFMD.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, assembled the largest position in Affimed NV (NASDAQ:AFMD). AQR Capital Management had $2.6 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $1.5 million position during the quarter. The following funds were also among the new AFMD investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Andre F. Perold’s HighVista Strategies.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Affimed NV (NASDAQ:AFMD) but similarly valued. We will take a look at Exagen Inc. (NASDAQ:XGN), China Distance Education Hldgs Ltd (NYSE:DL), Sol-Gel Technologies Ltd. (NASDAQ:SLGL), and RYB Education, Inc. (NYSE:RYB). This group of stocks’ market caps resemble AFMD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
XGN 6 13870 6
DL 1 1852 -1
SLGL 3 10404 0
RYB 4 12884 0
Average 3.5 9753 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $20 million in AFMD’s case. Exagen Inc. (NASDAQ:XGN) is the most popular stock in this table. On the other hand China Distance Education Hldgs Ltd (NYSE:DL) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Affimed NV (NASDAQ:AFMD) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately AFMD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on AFMD were disappointed as the stock returned -12.2% during the first two months of the fourth 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 70 percent of these stocks already outperformed the market in Q4.

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

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