At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Agenus Inc (NASDAQ:AGEN) at the end of the first quarter and determine whether the smart money was really smart about this stock.
Agenus Inc (NASDAQ:AGEN) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of March. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Despegar.com, Corp. (NYSE:DESP), First Mid Bancshares, Inc. (NASDAQ:FMBH), and AngioDynamics, Inc. (NASDAQ:ANGO) to gather more data points. Our calculations also showed that AGEN 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.
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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the recent hedge fund action encompassing Agenus Inc (NASDAQ:AGEN).
What does smart money think about Agenus Inc (NASDAQ:AGEN)?
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AGEN over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Cormorant Asset Management, managed by Bihua Chen, holds the largest position in Agenus Inc (NASDAQ:AGEN). Cormorant Asset Management has a $29.8 million position in the stock, comprising 1.4% of its 13F portfolio. Coming in second is Avoro Capital Advisors (venBio Select Advisor), led by Behzad Aghazadeh, holding a $6.7 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include D. E. Shaw’s D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors and Renaissance Technologies. In terms of the portfolio weights assigned to each position Cormorant Asset Management allocated the biggest weight to Agenus Inc (NASDAQ:AGEN), around 1.39% of its 13F portfolio. Trellus Management Company is also relatively very bullish on the stock, setting aside 0.44 percent of its 13F equity portfolio to AGEN.
Due to the fact that Agenus Inc (NASDAQ:AGEN) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few money managers that decided to sell off their positions entirely in the first quarter. It’s worth mentioning that Israel Englander’s Millennium Management said goodbye to the biggest investment of the 750 funds watched by Insider Monkey, valued at close to $2.9 million in stock. Bruce Kovner’s fund, Caxton Associates LP, also dropped its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Agenus Inc (NASDAQ:AGEN). These stocks are Despegar.com, Corp. (NYSE:DESP), First Mid Bancshares, Inc. (NASDAQ:FMBH), AngioDynamics, Inc. (NASDAQ:ANGO), and Cellectis SA (NASDAQ:CLLS). This group of stocks’ market valuations are closest to AGEN’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $45 million in AGEN’s case. Despegar.com, Corp. (NYSE:DESP) is the most popular stock in this table. On the other hand First Mid Bancshares, Inc. (NASDAQ:FMBH) is the least popular one with only 5 bullish hedge fund positions. Agenus Inc (NASDAQ:AGEN) is not the most popular stock in this group but hedge fund interest is still above average. 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 gained 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on AGEN as the stock returned 60.4% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.