With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Seagen Inc. (NASDAQ:SGEN).
Is SGEN a good stock to buy? Seagen Inc. (NASDAQ:SGEN) was in 37 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 39. SGEN shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 39 hedge funds in our database with SGEN positions at the end of the first quarter. Our calculations also showed that SGEN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. 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 homepage. Keeping this in mind let’s check out the fresh hedge fund action regarding Seagen Inc. (NASDAQ:SGEN).
Do Hedge Funds Think SGEN Is A Good Stock To Buy Now?
At second quarter’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the previous quarter. By comparison, 38 hedge funds held shares or bullish call options in SGEN a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Seagen Inc. (NASDAQ:SGEN) was held by Baker Bros. Advisors, which reported holding $7465.9 million worth of stock at the end of June. It was followed by Citadel Investment Group with a $203.8 million position. Other investors bullish on the company included Point72 Asset Management, Redmile Group, and Woodline Partners. In terms of the portfolio weights assigned to each position Baker Bros. Advisors allocated the biggest weight to Seagen Inc. (NASDAQ:SGEN), around 32.79% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, designating 2.39 percent of its 13F equity portfolio to SGEN.
Judging by the fact that Seagen Inc. (NASDAQ:SGEN) has faced declining sentiment from hedge fund managers, logic holds that there was a specific group of hedgies that slashed their positions entirely heading into Q3. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors sold off the biggest investment of all the hedgies followed by Insider Monkey, comprising about $14.2 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dropped its stock, about $11.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q3.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Seagen Inc. (NASDAQ:SGEN) but similarly valued. These stocks are The Kroger Co. (NYSE:KR), State Street Corporation (NYSE:STT), Keysight Technologies Inc (NYSE:KEYS), AMC Entertainment Holdings Inc (NYSE:AMC), Zebra Technologies Corporation (NASDAQ:ZBRA), Verisk Analytics, Inc. (NASDAQ:VRSK), and Maxim Integrated Products Inc. (NASDAQ:MXIM). All of these stocks’ market caps resemble SGEN’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 36.4 hedge funds with bullish positions and the average amount invested in these stocks was $1828 million. That figure was $8710 million in SGEN’s case. Maxim Integrated Products Inc. (NASDAQ:MXIM) is the most popular stock in this table. On the other hand AMC Entertainment Holdings Inc (NYSE:AMC) is the least popular one with only 21 bullish hedge fund positions. Seagen Inc. (NASDAQ:SGEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SGEN is 54.3. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on SGEN as the stock returned 2.7% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Seagen Inc. (NASDAQ:SGEN)
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Disclosure: None. This article was originally published at Insider Monkey.