At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not IGM Biosciences, Inc. (NASDAQ:IGMS) makes for a good investment right now.
Is IGMS a good stock to buy now? IGM Biosciences, Inc. (NASDAQ:IGMS) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that IGMS 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). 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 Coca-Cola Consolidated Inc. (NASDAQ:COKE), Aimmune Therapeutics Inc (NASDAQ:AIMT), and ExlService Holdings, Inc. (NASDAQ:EXLS) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are dozens of tools stock market investors use to evaluate stocks. A pair of the most underrated tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outperform the market by a healthy amount (see the details here).
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 15 best blue chip stocks 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. Now we’re going to take a look at the fresh hedge fund action encompassing IGM Biosciences, Inc. (NASDAQ:IGMS).
Do Hedge Funds Think IGMS Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IGMS 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.
The largest stake in IGM Biosciences, Inc. (NASDAQ:IGMS) was held by Redmile Group, which reported holding $252.8 million worth of stock at the end of September. It was followed by Baker Bros. Advisors with a $232.1 million position. Other investors bullish on the company included RA Capital Management, Alkeon Capital Management, and Hillhouse Capital Management. In terms of the portfolio weights assigned to each position Redmile Group allocated the biggest weight to IGM Biosciences, Inc. (NASDAQ:IGMS), around 4.64% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, setting aside 1.34 percent of its 13F equity portfolio to IGMS.
Seeing as IGM Biosciences, Inc. (NASDAQ:IGMS) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedgies who were dropping their full holdings heading into Q4. Intriguingly, Christopher James’s Partner Fund Management dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $8.5 million in stock, and Arsani William’s Logos Capital was right behind this move, as the fund said goodbye to about $6.7 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks similar to IGM Biosciences, Inc. (NASDAQ:IGMS). We will take a look at Coca-Cola Consolidated Inc. (NASDAQ:COKE), Aimmune Therapeutics Inc (NASDAQ:AIMT), ExlService Holdings, Inc. (NASDAQ:EXLS), CVB Financial Corp. (NASDAQ:CVBF), Vishay Intertechnology, Inc. (NYSE:VSH), CONMED Corporation (NYSE:CNMD), and Arco Platform Limited (NASDAQ:ARCE). This group of stocks’ market values resemble IGMS’s market value.
|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 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $189 million. That figure was $691 million in IGMS’s case. CONMED Corporation (NYSE:CNMD) is the most popular stock in this table. On the other hand Coca-Cola Consolidated Inc. (NASDAQ:COKE) is the least popular one with only 12 bullish hedge fund positions. IGM Biosciences, Inc. (NASDAQ:IGMS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IGMS is 44.5. 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. A small number of hedge funds were also right about betting on IGMS as the stock returned 18.5% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.