Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) to find out whether there were any major changes in hedge funds’ views.
Is YMAB a good stock to buy now? Money managers were reducing their bets on the stock. The number of bullish hedge fund positions retreated by 3 in recent months. Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) was in 10 hedge funds’ portfolios at the end of September. The all time high for this statistics is 13. Our calculations also showed that YMAB 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.
Today there are a lot of formulas investors use to analyze stocks. Two of the best formulas are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite money managers can beat their index-focused peers by a very impressive amount (see the details here).
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 we’re going to check out the latest hedge fund action encompassing Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB).
Do Hedge Funds Think YMAB Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in YMAB a year ago. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Cormorant Asset Management was the largest shareholder of Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), with a stake worth $53.7 million reported as of the end of September. Trailing Cormorant Asset Management was Polar Capital, which amassed a stake valued at $19.4 million. Sphera Global Healthcare Fund, Driehaus Capital, and Burrage Capital Management 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 Burrage Capital Management allocated the biggest weight to Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), around 3.73% of its 13F portfolio. Cormorant Asset Management is also relatively very bullish on the stock, dishing out 2.06 percent of its 13F equity portfolio to YMAB.
Seeing as Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) has experienced a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few fund managers that decided to sell off their positions entirely last quarter. It’s worth mentioning that Joseph Edelman’s Perceptive Advisors sold off the largest investment of all the hedgies tracked by Insider Monkey, valued at about $15.4 million in stock, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors was right behind this move, as the fund said goodbye to about $0.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB). We will take a look at Sapiens International Corporation N.V. (NASDAQ:SPNS), MAG Silver Corporation (NYSE:MAG), Ligand Pharmaceuticals Inc. (NASDAQ:LGND), CorVel Corporation (NASDAQ:CRVL), GCP Applied Technologies Inc. (NYSE:GCP), Cytokinetics, Inc. (NASDAQ:CYTK), and Maxar Technologies Inc (NYSE:MAXR). This group of stocks’ market valuations resemble YMAB’s market valuation.
|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 17 hedge funds with bullish positions and the average amount invested in these stocks was $230 million. That figure was $113 million in YMAB’s case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand MAG Silver Corporation (NYSE:MAG) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) is even less popular than MAG. Our overall hedge fund sentiment score for YMAB is 25.1. 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. Hedge funds clearly dropped the ball on YMAB as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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. A small number of hedge funds were also right about betting on YMAB as the stock returned 33.6% since Q3 (through December 8th) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.