Is XCUR A Good Stock To Buy Now?

With the third-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 fourth quarter. One of these stocks was Exicure, Inc. (NASDAQ:XCUR).

Is XCUR a good stock to buy now? The smart money was taking a bullish view. The number of long hedge fund positions increased by 2 lately. Exicure, Inc. (NASDAQ:XCUR) was in 11 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 11. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that XCUR 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). There were 9 hedge funds in our database with XCUR holdings at the end of June.

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.

Oleg Nodelman EcoR1 Capital

Oleg Nodelman of EcoR1 Capital

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. Keeping this in mind we’re going to view the key hedge fund action regarding Exicure, Inc. (NASDAQ:XCUR).

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

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the previous quarter. The graph below displays the number of hedge funds with bullish position in XCUR over the last 21 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

The largest stake in Exicure, Inc. (NASDAQ:XCUR) was held by Tybourne Capital Management, which reported holding $12.8 million worth of stock at the end of September. It was followed by Knoll Capital Management with a $2.2 million position. Other investors bullish on the company included Granite Point Capital, EcoR1 Capital, and Sphera Global Healthcare Fund. In terms of the portfolio weights assigned to each position Knoll Capital Management allocated the biggest weight to Exicure, Inc. (NASDAQ:XCUR), around 1.83% of its 13F portfolio. Tybourne Capital Management is also relatively very bullish on the stock, dishing out 0.32 percent of its 13F equity portfolio to XCUR.

As aggregate interest increased, key money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the largest position in Exicure, Inc. (NASDAQ:XCUR). Millennium Management had $0.2 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0 million investment in the stock during the quarter.

Let’s go over hedge fund activity in other stocks similar to Exicure, Inc. (NASDAQ:XCUR). We will take a look at Culp, Inc. (NYSE:CULP), Galectin Therapeutics Inc. (NASDAQ:GALT), Matinas Biopharma Holdings, Inc. (NYSE:MTNB), Vericity, Inc. (NASDAQ:VERY), Provident Bancorp, Inc. (NASDAQ:PVBC), PDL Community Bancorp (NASDAQ:PDLB), and Sterling Bancorp, Inc. (Southfield, MI) (NASDAQ:SBT). This group of stocks’ market caps resemble XCUR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CULP 14 18280 0
GALT 2 74 -2
MTNB 6 9947 -4
VERY 2 1177 0
PVBC 7 5171 2
PDLB 3 2125 1
SBT 5 1478 -2
Average 5.6 5465 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.6 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $22 million in XCUR’s case. Culp, Inc. (NYSE:CULP) is the most popular stock in this table. On the other hand Galectin Therapeutics Inc. (NASDAQ:GALT) is the least popular one with only 2 bullish hedge fund positions. Exicure, Inc. (NASDAQ:XCUR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for XCUR is 74.5. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 16.2 percentage points. Unfortunately XCUR wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on XCUR were disappointed as the stock returned -13.7% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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