Hedge Funds Have Never Been This Bullish On I-Mab (IMAB)
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 I-Mab (NASDAQ:IMAB).
I-Mab (NASDAQ:IMAB) investors should pay attention to an increase in hedge fund interest in recent months. I-Mab (NASDAQ:IMAB) was in 20 hedge funds' portfolios at the end of March. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMAB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Lei Zhang of Hillhouse Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. Now we're going to take a glance at the new hedge fund action encompassing I-Mab (NASDAQ:IMAB).
Do Hedge Funds Think IMAB Is A Good Stock To Buy Now?
At first quarter's end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the fourth quarter of 2020. By comparison, 4 hedge funds held shares or bullish call options in IMAB a year ago. With hedgies' capital changing hands, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in I-Mab (NASDAQ:IMAB) was held by Hillhouse Capital Management, which reported holding $320.7 million worth of stock at the end of December. It was followed by Adage Capital Management with a $59 million position. Other investors bullish on the company included Octagon Capital Advisors, Indus Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Octagon Capital Advisors allocated the biggest weight to I-Mab (NASDAQ:IMAB), around 9.68% of its 13F portfolio. Indus Capital is also relatively very bullish on the stock, designating 4.15 percent of its 13F equity portfolio to IMAB.
As industrywide interest jumped, specific money managers were breaking ground themselves. Segantii Capital, managed by Simon Sadler, created the biggest position in I-Mab (NASDAQ:IMAB). Segantii Capital had $9.7 million invested in the company at the end of the quarter. Josh Resnick's Jericho Capital Asset Management also made a $7.2 million investment in the stock during the quarter. The other funds with brand new IMAB positions are Frank Fu's CaaS Capital, Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, and Philip Best's Quaero Capital.
Let's now review hedge fund activity in other stocks similar to I-Mab (NASDAQ:IMAB). These stocks are 8x8, Inc. (NYSE:EGHT), Vishay Intertechnology, Inc. (NYSE:VSH), EPR Properties (NYSE:EPR), Sanderson Farms, Inc. (NASDAQ:SAFM), AMN Healthcare Services Inc (NYSE:AMN), TechnipFMC plc (NYSE:FTI), and Rush Street Interactive, Inc. (NYSE:RSI). This group of stocks' market caps resemble IMAB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EGHT,24,1006511,-2 VSH,32,565142,1 EPR,15,345162,0 SAFM,18,177554,-1 AMN,19,82099,6 FTI,25,409812,-10 RSI,17,116342,-9 Average,21.4,386089,-2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.4 hedge funds with bullish positions and the average amount invested in these stocks was $386 million. That figure was $509 million in IMAB's case. Vishay Intertechnology, Inc. (NYSE:VSH) is the most popular stock in this table. On the other hand EPR Properties (NYSE:EPR) is the least popular one with only 15 bullish hedge fund positions. I-Mab (NASDAQ:IMAB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IMAB is 54.7. 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. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on IMAB as the stock returned 59.8% since the end of the first quarter (through 7/16) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
