In this article we will analyze whether Yumanity Therapeutics, Inc. (NASDAQ:YMTX) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is YMTX a good stock to buy? Hedge fund interest in Yumanity Therapeutics, Inc. (NASDAQ:YMTX) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that YMTX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Xtant Medical Holdings, Inc. (NYSE:XTNT), Xinyuan Real Estate Co., Ltd. (NYSE:XIN), and Evans Bancorp Inc. (NYSE:EVBN) to gather more data points.
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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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 analyze the key hedge fund action regarding Yumanity Therapeutics, Inc. (NASDAQ:YMTX).
Do Hedge Funds Think YMTX Is A Good Stock To Buy Now?
At the end of March, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in YMTX a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Redmile Group was the largest shareholder of Yumanity Therapeutics, Inc. (NASDAQ:YMTX), with a stake worth $11.1 million reported as of the end of March. Trailing Redmile Group was Stonepine Capital, which amassed a stake valued at $6.1 million. Ikarian Capital, Sphera Global Healthcare Fund, and Pura Vida Investments 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 0 allocated the biggest weight to Yumanity Therapeutics, Inc. (NASDAQ:YMTX), around 3.28% of its 13F portfolio. 0 is also relatively very bullish on the stock, setting aside 0.29 percent of its 13F equity portfolio to YMTX.
Seeing as Yumanity Therapeutics, Inc. (NASDAQ:YMTX) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds that elected to cut their positions entirely heading into Q2. It’s worth mentioning that Renaissance Technologies dumped the largest investment of all the hedgies followed by Insider Monkey, worth about $0.3 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Yumanity Therapeutics, Inc. (NASDAQ:YMTX). We will take a look at Xtant Medical Holdings, Inc. (NYSE:XTNT), Xinyuan Real Estate Co., Ltd. (NYSE:XIN), Evans Bancorp Inc. (NYSE:EVBN), Select Interior Concepts, Inc. (NASDAQ:SIC), Gold Royalty Corp. (NYSE:GROY), Gold Standard Ventures Corp (NYSE:GSV), and RigNet Inc (NASDAQ:RNET). This group of stocks’ market valuations are closest to YMTX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XTNT | 4 | 174401 | 0 |
| XIN | 4 | 836 | 0 |
| EVBN | 3 | 1082 | -1 |
| SIC | 12 | 18500 | -4 |
| GROY | 2 | 3186 | 2 |
| GSV | 4 | 23065 | -4 |
| RNET | 11 | 34970 | 4 |
| Average | 5.7 | 36577 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.7 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $26 million in YMTX’s case. Select Interior Concepts, Inc. (NASDAQ:SIC) is the most popular stock in this table. On the other hand Gold Royalty Corp. (NYSE:GROY) is the least popular one with only 2 bullish hedge fund positions. Yumanity Therapeutics, Inc. (NASDAQ:YMTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for YMTX is 37.9. 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 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 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately YMTX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on YMTX were disappointed as the stock returned -34.2% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.