Is Cullinan Oncology, Inc. (CGEM) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Cullinan Oncology, Inc. (NASDAQ:CGEM) based on that data.

Is CGEM a good stock to buy? Prominent investors were betting on the stock. The number of long hedge fund positions improved by 21 in recent months. Cullinan Oncology, Inc. (NASDAQ:CGEM) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that CGEM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

At the moment there are many indicators stock traders employ to appraise publicly traded companies. A pair of the best indicators are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the top fund managers can outperform the S&P 500 by a solid amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Seth Klarman of Baupost Group

Seth Klarman of Baupost Group

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to go over the latest hedge fund action surrounding Cullinan Oncology, Inc. (NASDAQ:CGEM).

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

At the end of March, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21 from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CGEM over the last 23 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.

Is CGEM A Good Stock To Buy?

The largest stake in Cullinan Oncology, Inc. (NASDAQ:CGEM) was held by Baupost Group, which reported holding $71.7 million worth of stock at the end of December. It was followed by OrbiMed Advisors with a $47.8 million position. Other investors bullish on the company included Rock Springs Capital Management, Biotechnology Value Fund / BVF Inc, and Woodline Partners. In terms of the portfolio weights assigned to each position Logos Capital allocated the biggest weight to Cullinan Oncology, Inc. (NASDAQ:CGEM), around 1.68% of its 13F portfolio. Biotechnology Value Fund / BVF Inc is also relatively very bullish on the stock, dishing out 1.64 percent of its 13F equity portfolio to CGEM.

As industrywide interest jumped, key hedge funds have jumped into Cullinan Oncology, Inc. (NASDAQ:CGEM) headfirst. Baupost Group, managed by Seth Klarman, established the biggest position in Cullinan Oncology, Inc. (NASDAQ:CGEM). Baupost Group had $71.7 million invested in the company at the end of the quarter. OrbiMed Advisors also initiated a $47.8 million position during the quarter. The other funds with new positions in the stock are Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management, Mark Lampert’s Biotechnology Value Fund / BVF Inc, and Michael Rockefeller and KarláKroeker’s Woodline Partners.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Cullinan Oncology, Inc. (NASDAQ:CGEM) but similarly valued. These stocks are SJW Corp. (NYSE:SJW), Lindsay Corporation (NYSE:LNN), LexinFintech Holdings Ltd. (NASDAQ:LX), Boot Barn Holdings Inc (NYSE:BOOT), Black Stone Minerals LP (NYSE:BSM), Yext, Inc. (NYSE:YEXT), and BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX). This group of stocks’ market values resemble CGEM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SJW 9 73497 1
LNN 10 219448 -4
LX 11 28712 3
BOOT 18 102236 -2
BSM 5 13316 -2
YEXT 13 48039 2
BCRX 22 348348 -4
Average 12.6 119085 -0.9

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 $119 million. That figure was $341 million in CGEM’s case. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is the most popular stock in this table. On the other hand Black Stone Minerals LP (NYSE:BSM) is the least popular one with only 5 bullish hedge fund positions. Cullinan Oncology, Inc. (NASDAQ:CGEM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CGEM is 85.3. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately CGEM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CGEM were disappointed as the stock returned -35.3% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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