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 HOOKIPA Pharma Inc. (NASDAQ:HOOK) in this article.
Is HOOK a good stock to buy now? HOOKIPA Pharma Inc. (NASDAQ:HOOK) shareholders have witnessed a decrease in hedge fund interest lately. HOOKIPA Pharma Inc. (NASDAQ:HOOK) was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 9. There were 9 hedge funds in our database with HOOK holdings at the end of June. Our calculations also showed that HOOK 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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. Now let’s take a peek at the fresh hedge fund action encompassing HOOKIPA Pharma Inc. (NASDAQ:HOOK).
What have hedge funds been doing with HOOKIPA Pharma Inc. (NASDAQ:HOOK)?
At the end of September, 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. Below, you can check out the change in hedge fund sentiment towards HOOK over the last 21 quarters. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, Redmile Group was the largest shareholder of HOOKIPA Pharma Inc. (NASDAQ:HOOK), with a stake worth $17.5 million reported as of the end of September. Trailing Redmile Group was Hillhouse Capital Management, which amassed a stake valued at $8.9 million. Baker Bros. Advisors, Samsara BioCapital, and DAFNA Capital 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 Redmile Group allocated the biggest weight to HOOKIPA Pharma Inc. (NASDAQ:HOOK), around 0.32% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, designating 0.31 percent of its 13F equity portfolio to HOOK.
Judging by the fact that HOOKIPA Pharma Inc. (NASDAQ:HOOK) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers who were dropping their positions entirely in the third quarter. Interestingly, Ken Griffin’s Citadel Investment Group sold off the largest investment of the 750 funds followed by Insider Monkey, totaling about $14.4 million in stock. Renaissance Technologies, also dropped its stock, about $0.3 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as HOOKIPA Pharma Inc. (NASDAQ:HOOK) but similarly valued. These stocks are Rimini Street, Inc. (NASDAQ:RMNI), NextCure, Inc. (NASDAQ:NXTC), Fidus Investment Corp (NASDAQ:FDUS), ProQR Therapeutics NV (NASDAQ:PRQR), The Marcus Corporation (NYSE:MCS), Greenlight Capital Re, Ltd. (NASDAQ:GLRE), and Preformed Line Products Company (NASDAQ:PLPC). This group of stocks’ market valuations are similar to HOOK’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 7.7 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $34 million in HOOK’s case. NextCure, Inc. (NASDAQ:NXTC) is the most popular stock in this table. On the other hand Greenlight Capital Re, Ltd. (NASDAQ:GLRE) is the least popular one with only 4 bullish hedge fund positions. HOOKIPA Pharma Inc. (NASDAQ:HOOK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HOOK is 43. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on HOOK as the stock returned 16.1% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.