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 Pandion Therapeutics Inc. (NASDAQ:PAND) in this article.
Is PAND a good stock to buy now? The best stock pickers were in an optimistic mood. The number of bullish hedge fund positions inched up by 14 in recent months. Pandion Therapeutics Inc. (NASDAQ:PAND) was in 14 hedge funds’ portfolios at the end of September. Our calculations also showed that PAND 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 scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. With all of this in mind let’s take a peek at the new hedge fund action encompassing Pandion Therapeutics Inc. (NASDAQ:PAND).
Do Hedge Funds Think PAND Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14 from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in PAND 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, RA Capital Management, managed by Peter Kolchinsky, holds the number one position in Pandion Therapeutics Inc. (NASDAQ:PAND). RA Capital Management has a $20.3 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is OrbiMed Advisors, with a $17 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Jeremy Green’s Redmile Group, Arsani William’s Logos Capital and Neil Shahrestani’s Ikarian Capital. In terms of the portfolio weights assigned to each position Logos Capital allocated the biggest weight to Pandion Therapeutics Inc. (NASDAQ:PAND), around 0.68% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, dishing out 0.37 percent of its 13F equity portfolio to PAND.
Consequently, specific money managers have been driving this bullishness. RA Capital Management, managed by Peter Kolchinsky, initiated the biggest position in Pandion Therapeutics Inc. (NASDAQ:PAND). RA Capital Management had $20.3 million invested in the company at the end of the quarter. OrbiMed Advisors also made a $17 million investment in the stock during the quarter. The other funds with brand new PAND positions are Jeremy Green’s Redmile Group, Arsani William’s Logos Capital, and Neil Shahrestani’s Ikarian Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Pandion Therapeutics Inc. (NASDAQ:PAND) but similarly valued. We will take a look at Urstadt Biddle Properties Inc. (NYSE:UBP), Viemed Healthcare, Inc. (NASDAQ:VMD), Caesarstone Ltd (NASDAQ:CSTE), Revlon Inc (NYSE:REV), LendingClub Corp (NYSE:LC), The Hackett Group, Inc. (NASDAQ:HCKT), and Alerus Financial Corporation (NASDAQ:ALRS). All of these stocks’ market caps are closest to PAND’s market cap.
|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 12 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $69 million in PAND’s case. Revlon Inc (NYSE:REV) is the most popular stock in this table. On the other hand Alerus Financial Corporation (NASDAQ:ALRS) is the least popular one with only 1 bullish hedge fund positions. Pandion Therapeutics Inc. (NASDAQ:PAND) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PAND is 43.5. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on PAND as the stock returned 53.3% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.