Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Juno Therapeutics Inc (NASDAQ:JUNO) a bargain? Money managers are in a bullish mood. The number of bullish hedge fund investments strengthened by 5 in recent months. JUNO was in 16 hedge funds’ portfolios at the end of the third quarter of 2016. There were 11 hedge funds in our database with JUNO positions at the end of the previous quarter. 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 Graphic Packaging Holding Company (NYSE:GPK), Eaton Vance Corp (NYSE:EV), and Retail Properties of America Inc (NYSE:RPAI) 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.
How are hedge funds trading Juno Therapeutics Inc (NASDAQ:JUNO)?
Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 45% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in JUNO over the last 5 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Christopher James’ Partner Fund Management has the most valuable position in Juno Therapeutics Inc (NASDAQ:JUNO), worth close to $33.7 million, comprising 1% of its total 13F portfolio. On Partner Fund Management’s heels is Stanley Druckenmiller of Duquesne Capital, with a $14.8 million position; 1.3% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions consist of Cliff Asness’ AQR Capital Management, Kris Jenner, Gordon Bussard, and Graham McPhail’s Rock Springs Capital Management. 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.