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 Kura Oncology, Inc. (NASDAQ:KURA) in this article.
Is KURA a good stock to buy? Kura Oncology, Inc. (NASDAQ:KURA) was in 34 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. KURA investors should be aware of an increase in activity from the world’s largest hedge funds lately. There were 31 hedge funds in our database with KURA positions at the end of the second quarter. Our calculations also showed that KURA 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 15 best blue chip stocks to buy 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 let’s review the latest hedge fund action encompassing Kura Oncology, Inc. (NASDAQ:KURA).
Do Hedge Funds Think KURA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KURA over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, EcoR1 Capital held the most valuable stake in Kura Oncology, Inc. (NASDAQ:KURA), which was worth $141.2 million at the end of the third quarter. On the second spot was Avoro Capital Advisors (venBio Select Advisor) which amassed $74.6 million worth of shares. Citadel Investment Group, Adage Capital Management, and Biotechnology Value Fund / BVF Inc 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 EcoR1 Capital allocated the biggest weight to Kura Oncology, Inc. (NASDAQ:KURA), around 10.07% of its 13F portfolio. Acuta Capital Partners is also relatively very bullish on the stock, dishing out 8.1 percent of its 13F equity portfolio to KURA.
Now, key money managers have jumped into Kura Oncology, Inc. (NASDAQ:KURA) headfirst. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, initiated the most valuable position in Kura Oncology, Inc. (NASDAQ:KURA). Polar Capital had $15.3 million invested in the company at the end of the quarter. Ken Greenberg and David Kim’s Ghost Tree Capital also made a $6.9 million investment in the stock during the quarter. The other funds with brand new KURA positions are Aaron Cowen’s Suvretta Capital Management, Efrem Kamen’s Pura Vida Investments, and Bhagwan Jay Rao’s Integral Health Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Kura Oncology, Inc. (NASDAQ:KURA) but similarly valued. These stocks are AlloVir, Inc. (NASDAQ:ALVR), Six Flags Entertainment Corp (NYSE:SIX), AMTD International Inc. (NYSE:HKIB), MaxLinear, Inc. (NYSE:MXL), Hub Group Inc (NASDAQ:HUBG), Sunstone Hotel Investors Inc (NYSE:SHO), and Sonic Automotive Inc (NYSE:SAH). This group of stocks’ market valuations are closest to KURA’s market valuation.
|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 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $175 million. That figure was $567 million in KURA’s case. Six Flags Entertainment Corp (NYSE:SIX) is the most popular stock in this table. On the other hand AMTD International Inc. (NYSE:HKIB) is the least popular one with only 1 bullish hedge fund positions. Kura Oncology, Inc. (NASDAQ:KURA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KURA is 83.8. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on KURA as the stock returned 21.2% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.