Is Immune Design Corp (IMDZ) Going to Burn Investors?

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Immune Design Corp (NASDAQ:IMDZ).

Immune Design Corp (NASDAQ:IMDZ) has experienced an increase in enthusiasm from smart money recently. There were 7 hedge funds in our database with IMDZ positions at the end of the second quarter, 3 fewer than there were at the end of September. 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 Terraping 3 Acquisition Corp (NASDAQ:TRTL), Harmony Merger Corp (NASDAQ:HRMN), and Stage Stores Inc (NYSE:SSI) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How are hedge funds trading Immune Desing Corp (NASDAQ:IMDZ)?

Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 43% surge from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in IMDZ heading into this year, which is now 25% higher. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).


Of the funds tracked by Insider Monkey, Mark Lampert of Biotechnology Value Fund / BVF Inc holds the number one position in Immune Design Corp (NASDAQ:IMDZ), owning a $9.1 million position in the stock, comprising 1.7% of its 13F portfolio. The second most bullish fund manager is Bihua Chen of Cormorant Asset Management, with a $3.3 million position. Remaining hedge funds and institutional investors that hold long positions contain Ori Hershkovitz’s Nexthera Capital, Anand Parekh’s Alyeska Investment Group, and Julian Baker and Felix Baker’s Baker Bros. Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-microcap stocks.

Consequently, some big names have been driving this bullishness. Biotechnology Value Fund / BVF Inc initiated the most outsized position in Immune Design Corp (NASDAQ:IMDZ). Anand Parekh’s Alyeska Investment Group also initiated a $1.3 million position during the quarter. The following funds were also among the new IMDZ investors: Renaissance Technologies, one of the largest hedge funds in the world, Joseph Edelman’s Perceptive Advisors, and Nathan Fischel’s DAFNA Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Immune Design Corp (NASDAQ:IMDZ). These stocks are Terraping 3 Acquisition Corp (NASDAQ:TRTL), Harmony Merger Corp (NASDAQ:HRMN), Stage Stores Inc (NYSE:SSI), and Salem Communications Corp (NASDAQ:SALM). This group of stocks’ market valuations are closest to IMDZ’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TRTL 11 40949 -2
HRMN 7 31686 1
SSI 5 2413 2
SALM 6 8875 0

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $20 million in IMDZ’s case. Terraping 3 Acquisition Corp (NASDAQ:TRTL) is the most popular stock in this table. On the other hand Stage Stores Inc (NYSE:SSI) is the least popular one with only 5 bullish hedge fund positions. Immune Design Corp (NASDAQ:IMDZ) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TRTL might be a better candidate to consider taking a long position in.

Disclosure: None