Were Hedge Funds Right About Repare Therapeutics Inc. (RPTX)?
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Repare Therapeutics Inc. (NASDAQ:RPTX) based on those filings.
Hedge fund interest in Repare Therapeutics Inc. (NASDAQ:RPTX) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that RPTX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare RPTX to other stocks including 111, Inc. (NASDAQ:YI), Rite Aid Corporation (NYSE:RAD), and Golar LNG Limited (NASDAQ:GLNG) to get a better sense of its popularity.
In today’s marketplace there are plenty of metrics stock market investors use to analyze publicly traded companies. A couple of the less utilized metrics are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outpace the market by a significant amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Matthew Halbower of Pentwater Capital
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Do Hedge Funds Think RPTX Is A Good Stock To Buy Now?
At the end of March, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RPTX over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the number one position in Repare Therapeutics Inc. (NASDAQ:RPTX). Biotechnology Value Fund / BVF Inc has a $114.2 million position in the stock, comprising 4.3% of its 13F portfolio. On Biotechnology Value Fund / BVF Inc's heels is OrbiMed Advisors, which holds a $105.2 million position; 1% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism contain Jeremy Green's Redmile Group, Catherine D. Wood's ARK Investment Management and Arsani William's Logos Capital. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Repare Therapeutics Inc. (NASDAQ:RPTX), around 4.28% of its 13F portfolio. Stepstone Group is also relatively very bullish on the stock, dishing out 4.12 percent of its 13F equity portfolio to RPTX.
Because Repare Therapeutics Inc. (NASDAQ:RPTX) has faced falling interest from the entirety of the hedge funds we track, we can see that there were a few money managers who sold off their full holdings heading into Q2. Interestingly, Israel Englander's Millennium Management dropped the biggest stake of the "upper crust" of funds tracked by Insider Monkey, totaling about $3.3 million in stock, and Anand Parekh's Alyeska Investment Group was right behind this move, as the fund cut about $1.7 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Repare Therapeutics Inc. (NASDAQ:RPTX) but similarly valued. These stocks are 111, Inc. (NASDAQ:YI), Rite Aid Corporation (NYSE:RAD), Golar LNG Limited (NASDAQ:GLNG), Benchmark Electronics, Inc. (NYSE:BHE), Forestar Group Inc. (NYSE:FOR), Constellation Pharmaceuticals, Inc. (NASDAQ:CNST), and Monarch Casino & Resort, Inc. (NASDAQ:MCRI). All of these stocks' market caps are closest to RPTX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position YI,4,5158,-1 RAD,16,82115,2 GLNG,20,265009,-11 BHE,11,38054,0 FOR,14,145832,3 CNST,26,324808,-9 MCRI,13,97368,-1 Average,14.9,136906,-2.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $137 million. That figure was $427 million in RPTX's case. Constellation Pharmaceuticals, Inc. (NASDAQ:CNST) is the most popular stock in this table. On the other hand 111, Inc. (NASDAQ:YI) is the least popular one with only 4 bullish hedge fund positions. Repare Therapeutics Inc. (NASDAQ:RPTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RPTX is 66.8. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately RPTX wasn't nearly as popular as these 5 stocks and hedge funds that were betting on RPTX were disappointed as the stock returned 8.9% since the end of March (through 7/23) 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.
