Is CRVS A Good Stock To Buy Now?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS).

Is CRVS a good stock to buy now? Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) has experienced a decrease in activity from the world’s largest hedge funds in recent months. Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 11. Our calculations also showed that CRVS isn’t among the 30 most popular stocks among hedge funds (click for Q3 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 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Peter Algert of Algert Global

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 website. With all of this in mind let’s take a look at the fresh hedge fund action encompassing Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS).

What does smart money think about Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS)?

Heading into the fourth quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -22% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CRVS over the last 21 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, OrbiMed Advisors held the most valuable stake in Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), which was worth $27.1 million at the end of the third quarter. On the second spot was Adams Street Partners which amassed $13.1 million worth of shares. Biotechnology Value Fund / BVF Inc, Renaissance Technologies, and Millennium 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 Adams Street Partners allocated the biggest weight to Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), around 3.46% of its 13F portfolio. Puissance Capital Managementá is also relatively very bullish on the stock, designating 0.88 percent of its 13F equity portfolio to CRVS.

Since Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) has experienced falling interest from hedge fund managers, it’s safe to say that there exists a select few fund managers that elected to cut their positions entirely in the third quarter. Intriguingly, Oleg Nodelman’s EcoR1 Capital cut the largest stake of all the hedgies monitored by Insider Monkey, valued at an estimated $2 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund dropped about $0.1 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) but similarly valued. We will take a look at PRGX Global Inc (NASDAQ:PRGX), Intrepid Potash, Inc. (NYSE:IPI), Identiv, Inc. (NASDAQ:INVE), Bankwell Financial Group, Inc. (NASDAQ:BWFG), Orgenesis Inc. (NASDAQ:ORGS), Vista Gold Corp. (NYSE:VGZ), and InflaRx N.V. (NASDAQ:IFRX). This group of stocks’ market caps resemble CRVS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PRGX 9 38796 -1
IPI 7 3023 -1
INVE 8 12583 6
BWFG 6 24188 0
ORGS 2 3210 -4
VGZ 2 20819 -1
IFRX 6 8306 -5
Average 5.7 15846 -0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.7 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $52 million in CRVS’s case. PRGX Global Inc (NASDAQ:PRGX) is the most popular stock in this table. On the other hand Orgenesis Inc. (NASDAQ:ORGS) is the least popular one with only 2 bullish hedge fund positions. Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CRVS is 57.8. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately CRVS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CRVS were disappointed as the stock returned -2.5% since the end of September (through 12/2) 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 many of these stocks already outperformed the market so far this year.

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