Is CTMX A Good Stock To Buy According To Hedge Funds?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about CytomX Therapeutics, Inc. (NASDAQ:CTMX) in this article.

Is CTMX a good stock to buy? CytomX Therapeutics, Inc. (NASDAQ:CTMX) investors should pay attention to a decrease in enthusiasm from smart money recently. CytomX Therapeutics, Inc. (NASDAQ:CTMX) was in 20 hedge funds’ portfolios at the end of September. The all time high for this statistic is 22. There were 22 hedge funds in our database with CTMX positions at the end of the second quarter. Our calculations also showed that CTMX 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.

Kerr Neilson of Platinum Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 we’re going to take a peek at the fresh hedge fund action surrounding CytomX Therapeutics, Inc. (NASDAQ:CTMX).

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

Heading into the fourth quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in CTMX a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the biggest position in CytomX Therapeutics, Inc. (NASDAQ:CTMX). Biotechnology Value Fund / BVF Inc has a $23.7 million position in the stock, comprising 1.3% of its 13F portfolio. On Biotechnology Value Fund / BVF Inc’s heels is Perceptive Advisors, led by Joseph Edelman, holding a $17.1 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism encompass Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to CytomX Therapeutics, Inc. (NASDAQ:CTMX), around 1.29% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, setting aside 0.25 percent of its 13F equity portfolio to CTMX.

Seeing as CytomX Therapeutics, Inc. (NASDAQ:CTMX) has faced falling interest from the aggregate hedge fund industry, we can see that there exists a select few money managers who were dropping their positions entirely by the end of the third quarter. Interestingly, Jeffrey Jay and David Kroin’s Great Point Partners cut the largest investment of all the hedgies followed by Insider Monkey, totaling about $12.1 million in stock. Steve Cohen’s fund, Point72 Asset Management, also said goodbye to its stock, about $8.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CytomX Therapeutics, Inc. (NASDAQ:CTMX) but similarly valued. These stocks are Hooker Furniture Corporation (NASDAQ:HOFT), Americas Gold and Silver Corporation (NYSE:USAS), OneWater Marine Inc. (NASDAQ:ONEW), Del Taco Restaurants Inc (NASDAQ:TACO), Ares Commercial Real Estate Corp (NYSE:ACRE), Noodles & Co (NASDAQ:NDLS), and Oxford Immunotec Global PLC (NASDAQ:OXFD). This group of stocks’ market caps are closest to CTMX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HOFT 10 84583 2
USAS 4 6087 -2
ONEW 11 38634 6
TACO 15 21195 3
ACRE 9 24591 -1
NDLS 19 67028 1
OXFD 20 136176 2
Average 12.6 54042 1.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $75 million in CTMX’s case. Oxford Immunotec Global PLC (NASDAQ:OXFD) is the most popular stock in this table. On the other hand Americas Gold and Silver Corporation (NYSE:USAS) is the least popular one with only 4 bullish hedge fund positions. CytomX Therapeutics, Inc. (NASDAQ:CTMX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CTMX is 80.3. 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. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on CTMX as the stock returned 18.8% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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