While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Turning Point Therapeutics, Inc. (NASDAQ:TPTX).
Turning Point Therapeutics, Inc. (NASDAQ:TPTX) has experienced an increase in hedge fund sentiment in recent months. Turning Point Therapeutics, Inc. (NASDAQ:TPTX) was in 33 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TPTX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Do Hedge Funds Think TPTX Is A Good Stock To Buy Now?
At first quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in TPTX a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
More specifically, Cormorant Asset Management was the largest shareholder of Turning Point Therapeutics, Inc. (NASDAQ:TPTX), with a stake worth $260.1 million reported as of the end of March. Trailing Cormorant Asset Management was OrbiMed Advisors, which amassed a stake valued at $223.4 million. Alkeon Capital Management, Farallon Capital, and Consonance 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 Cormorant Asset Management allocated the biggest weight to Turning Point Therapeutics, Inc. (NASDAQ:TPTX), around 5.8% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, earmarking 5.53 percent of its 13F equity portfolio to TPTX.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Farallon Capital, assembled the most outsized position in Turning Point Therapeutics, Inc. (NASDAQ:TPTX). Farallon Capital had $47.3 million invested in the company at the end of the quarter. Mitchell Blutt’s Consonance Capital Management also made a $42.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Arsani William’s Logos Capital, Michael Rockefeller and KarláKroeker’s Woodline Partners, and Krishen Sud’s Sivik Global Healthcare.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Turning Point Therapeutics, Inc. (NASDAQ:TPTX) but similarly valued. We will take a look at PennyMac Financial Services Inc (NYSE:PFSI), Silgan Holdings Inc. (NASDAQ:SLGN), The Chemours Company (NYSE:CC), Clean Harbors Inc (NYSE:CLH), Select Medical Holdings Corporation (NYSE:SEM), frontdoor, inc. (NASDAQ:FTDR), and HUYA Inc. (NYSE:HUYA). This group of stocks’ market values match TPTX’s market value.
|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 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $430 million. That figure was $806 million in TPTX’s case. frontdoor, inc. (NASDAQ:FTDR) is the most popular stock in this table. On the other hand HUYA Inc. (NYSE:HUYA) is the least popular one with only 13 bullish hedge fund positions. Turning Point Therapeutics, Inc. (NASDAQ:TPTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TPTX is 83.5. 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 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately TPTX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TPTX were disappointed as the stock returned -19.4% since the end of March (through 7/2) 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.