With the fourth-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter of 2021. One of these stocks was Iovance Biotherapeutics, Inc. (NASDAQ:IOVA).
Is IOVA stock a buy or sell? Money managers were becoming hopeful. The number of bullish hedge fund bets improved by 1 in recent months. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) was in 41 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 43. Our calculations also showed that IOVA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 124 percentage points since March 2017 (see the details here).
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 10 best battery stocks to buy to identify the next stock with 10x 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 we’re going to take a gander at the key hedge fund action regarding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA).
Do Hedge Funds Think IOVA Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the third quarter of 2020. By comparison, 32 hedge funds held shares or bullish call options in IOVA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, ARK Investment Management, managed by Catherine D. Wood, holds the number one position in Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). ARK Investment Management has a $709.8 million position in the stock, comprising 1.9% of its 13F portfolio. Coming in second is Perceptive Advisors, managed by Joseph Edelman, which holds a $425.3 million position; the fund has 4.6% of its 13F portfolio invested in the stock. Remaining peers with similar optimism contain Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor), OrbiMed Advisors and Farallon Capital. In terms of the portfolio weights assigned to each position Consonance Capital Management allocated the biggest weight to Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), around 7.41% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, dishing out 6.91 percent of its 13F equity portfolio to IOVA.
With a general bullishness amongst the heavyweights, key money managers have jumped into Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) headfirst. Consonance Capital Management, managed by Mitchell Blutt, established the most outsized position in Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Consonance Capital Management had $79.4 million invested in the company at the end of the quarter. Guy Shahar’s DSAM Partners also initiated a $4.7 million position during the quarter. The other funds with new positions in the stock are Vishal Saluja and Pham Quang’s Endurant Capital Management, Michael Castor’s Sio Capital, and Parvinder Thiara’s Athanor Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) but similarly valued. We will take a look at Ares Management Corp (NYSE:ARES), United Therapeutics Corporation (NASDAQ:UTHR), Santander Consumer USA Holdings Inc (NYSE:SC), LHC Group, Inc. (NASDAQ:LHCG), TIM S.A. (NYSE:TIMB), Terminix Global Holdings, Inc. (NYSE:TMX), and Axalta Coating Systems Ltd. (NYSE:AXTA). All of these stocks’ market caps are closest to IOVA’s market cap.
|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 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $753 million. That figure was $2472 million in IOVA’s case. Axalta Coating Systems Ltd. (NYSE:AXTA) is the most popular stock in this table. On the other hand TIM S.A. (NYSE:TIMB) is the least popular one with only 12 bullish hedge fund positions. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IOVA is 77.3. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately IOVA wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on IOVA were disappointed as the stock returned -32.4% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.