Should You Avoid Sesen Bio, Inc. (SESN)?

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Sesen Bio, Inc. (NASDAQ:SESN) based on that data.

Sesen Bio, Inc. (NASDAQ:SESN) shareholders have witnessed a decrease in enthusiasm from smart money of late. SESN was in 5 hedge funds’ portfolios at the end of the first quarter of 2020. There were 6 hedge funds in our database with SESN holdings at the end of the previous quarter. Our calculations also showed that SESN isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 21st century investor’s toolkit there are a large number of tools investors employ to assess stocks. Two of the most useful tools are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can outperform the S&P 500 by a healthy amount (see the details here).

Kamran Moghtaderi of Eversept Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a glance at the new hedge fund action encompassing Sesen Bio, Inc. (NASDAQ:SESN).

How are hedge funds trading Sesen Bio, Inc. (NASDAQ:SESN)?

At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SESN over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Sesen Bio, Inc. (NASDAQ:SESN) was held by Kingdon Capital, which reported holding $1 million worth of stock at the end of September. It was followed by Alyeska Investment Group with a $0.8 million position. Other investors bullish on the company included Eversept Partners, Renaissance Technologies, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Eversept Partners allocated the biggest weight to Sesen Bio, Inc. (NASDAQ:SESN), around 0.18% of its 13F portfolio. Kingdon Capital is also relatively very bullish on the stock, designating 0.18 percent of its 13F equity portfolio to SESN.

Since Sesen Bio, Inc. (NASDAQ:SESN) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of fund managers that elected to cut their entire stakes in the first quarter. Interestingly, Michael Gelband’s ExodusPoint Capital said goodbye to the largest investment of the 750 funds watched by Insider Monkey, worth an estimated $0.1 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dumped about $0.1 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds in the first quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Sesen Bio, Inc. (NASDAQ:SESN) but similarly valued. These stocks are Pintec Technology Holdings Limited (NASDAQ:PT), Ranger Energy Services, Inc. (NYSE:RNGR), Amtech Systems, Inc. (NASDAQ:ASYS), and Veritone, Inc. (NASDAQ:VERI). This group of stocks’ market caps match SESN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PT 2 113 1
RNGR 3 2937 0
ASYS 7 8053 1
VERI 2 155 0
Average 3.5 2815 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $2 million in SESN’s case. Amtech Systems, Inc. (NASDAQ:ASYS) is the most popular stock in this table. On the other hand Pintec Technology Holdings Limited (NASDAQ:PT) is the least popular one with only 2 bullish hedge fund positions. Sesen Bio, Inc. (NASDAQ:SESN) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on SESN as the stock returned 43.3% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Follow Sesen Bio Inc. (NASDAQ:SESN)

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