Is MGNX Stock A Buy or Sell?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 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 MacroGenics Inc (NASDAQ:MGNX) in this article.

Is MGNX stock a buy? Prominent investors were turning less bullish. The number of bullish hedge fund positions shrunk by 1 recently. MacroGenics Inc (NASDAQ:MGNX) was in 23 hedge funds’ portfolios at the end of December. The all time high for this statistic is 24. Our calculations also showed that MGNX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 24 hedge funds in our database with MGNX positions at the end of the third quarter.

Today there are plenty of indicators shareholders have at their disposal to value publicly traded companies. A couple of the best indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top money managers can trounce the S&P 500 by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 197% since March 2017 (through March 2021) and beat the S&P 500 Index by 124 percentage points. You can download a sample issue of this newsletter on our website .

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now 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 let’s take a peek at the recent hedge fund action regarding MacroGenics Inc (NASDAQ:MGNX).

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

At fourth quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MGNX over the last 22 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

More specifically, RA Capital Management was the largest shareholder of MacroGenics Inc (NASDAQ:MGNX), with a stake worth $100 million reported as of the end of December. Trailing RA Capital Management was Consonance Capital Management, which amassed a stake valued at $52.6 million. Citadel Investment Group, Point72 Asset Management, and Perceptive Advisors 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 Consonance Capital Management allocated the biggest weight to MacroGenics Inc (NASDAQ:MGNX), around 4.91% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, earmarking 4.6 percent of its 13F equity portfolio to MGNX.

Due to the fact that MacroGenics Inc (NASDAQ:MGNX) has witnessed a decline in interest from the smart money, it’s safe to say that there exists a select few fund managers who were dropping their positions entirely in the fourth quarter. At the top of the heap, Brad Farber’s Atika Capital sold off the largest investment of the 750 funds followed by Insider Monkey, worth about $5.1 million in stock, and Vishal Saluja and Pham Quang’s Endurant Capital Management was right behind this move, as the fund dumped about $2.5 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 1 funds in the fourth quarter.

Let’s go over hedge fund activity in other stocks similar to MacroGenics Inc (NASDAQ:MGNX). These stocks are Denbury Inc. (NYSE:DEN), FBL Financial Group, Inc. (NYSE:FFG), Radware Ltd. (NASDAQ:RDWR), AAR Corp. (NYSE:AIR), Nurix Therapeutics, Inc. (NASDAQ:NRIX), Nexa Resources S.A. (NYSE:NEXA), and Cellectis SA (NASDAQ:CLLS). All of these stocks’ market caps are similar to MGNX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $367 million in MGNX’s case. Denbury Inc. (NYSE:DEN) is the most popular stock in this table. On the other hand Nexa Resources S.A. (NYSE:NEXA) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks MacroGenics Inc (NASDAQ:MGNX) is more popular among hedge funds. Our overall hedge fund sentiment score for MGNX is 82.8. 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 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 returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on MGNX as the stock returned 39.4% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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