Is Kymera Therapeutics, Inc. (KYMR) A Good Stock To Buy?

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Kymera Therapeutics, Inc. (NASDAQ:KYMR).

Is KYMR a good stock to buy? Hedge fund interest in Kymera Therapeutics, Inc. (NASDAQ:KYMR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that KYMR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare KYMR to other stocks including Prospect Capital Corporation (NASDAQ:PSEC), Globalstar, Inc. (PINK:GSAT), and Alignment Healthcare, Inc. (NASDAQ:ALHC) to get a better sense of its popularity.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a gander at the fresh hedge fund action surrounding Kymera Therapeutics, Inc. (NASDAQ:KYMR).

Do Hedge Funds Think KYMR Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 21 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 KYMR over the last 25 quarters. So, let’s see 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, Mark Lampert’s Biotechnology Value Fund / BVF Inc has the biggest position in Kymera Therapeutics, Inc. (NASDAQ:KYMR), worth close to $186.8 million, accounting for 7.3% of its total 13F portfolio. Sitting at the No. 2 spot is Redmile Group, led by Jeremy Green, holding a $164.1 million position; the fund has 2.9% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism encompass Julian Baker and Felix Baker’s Baker Bros. Advisors, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Richard Driehaus’s Driehaus Capital. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Kymera Therapeutics, Inc. (NASDAQ:KYMR), around 7.29% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, dishing out 2.86 percent of its 13F equity portfolio to KYMR.

Since Kymera Therapeutics, Inc. (NASDAQ:KYMR) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers that elected to cut their entire stakes heading into Q4. It’s worth mentioning that Oleg Nodelman’s EcoR1 Capital cut the biggest position of all the hedgies monitored by Insider Monkey, valued at close to $25.2 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dropped its stock, about $5.8 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Kymera Therapeutics, Inc. (NASDAQ:KYMR). We will take a look at Prospect Capital Corporation (NASDAQ:PSEC), Globalstar, Inc. (NYSE:GSAT), Alignment Healthcare, Inc. (NASDAQ:ALHC), Lilium N.V. (NASDAQ:LILM), Cytokinetics, Inc. (NASDAQ:CYTK), ALX Oncology Holdings Inc. (NASDAQ:ALXO), and Rackspace Technology, Inc. (NASDAQ:RXT). This group of stocks’ market caps are similar to KYMR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $250 million. That figure was $700 million in KYMR’s case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Alignment Healthcare, Inc. (NASDAQ:ALHC) is the least popular one with only 5 bullish hedge fund positions. Kymera Therapeutics, Inc. (NASDAQ:KYMR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KYMR is 73.6. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on KYMR as the stock returned 8.1% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.