Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Inovio Pharmaceuticals Inc (NYSE:INO).
Inovio Pharmaceuticals Inc (NYSE:INO) shareholders have witnessed an increase in support from the world’s most elite money managers recently. Our calculations also showed that INO 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.
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. 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 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Daniel Och, Founder of OZ Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to view the fresh hedge fund action encompassing Inovio Pharmaceuticals Inc (NYSE:INO).
How are hedge funds trading Inovio Pharmaceuticals Inc (NYSE:INO)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 60% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in INO a year ago. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Inovio Pharmaceuticals Inc (NYSE:INO), with a stake worth $12.6 million reported as of the end of September. Trailing Millennium Management was Citadel Investment Group, which amassed a stake valued at $6.5 million. Renaissance Technologies, Balyasny Asset Management, and OZ 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 Balyasny Asset Management allocated the biggest weight to Inovio Pharmaceuticals Inc (NYSE:INO), around 0.03% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to INO.
As one would reasonably expect, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the most valuable position in Inovio Pharmaceuticals Inc (NYSE:INO). Balyasny Asset Management had $2.5 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated a $1.9 million position during the quarter. The other funds with new positions in the stock are Joel Greenblatt’s Gotham Asset Management, Paul Tudor Jones’s Tudor Investment Corp, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks similar to Inovio Pharmaceuticals Inc (NYSE:INO). These stocks are Urban Edge Properties (NYSE:UE), PennyMac Mortgage Investment Trust (NYSE:PMT), Gray Television, Inc. (NYSE:GTN), and Myriad Genetics, Inc. (NASDAQ:MYGN). This group of stocks’ market caps are similar to INO’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UE,21,68712,2 PMT,12,56020,-7 GTN,21,131988,-3 MYGN,11,102643,-4 Average,16.25,89841,-3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $90 million. That figure was $23 million in INO’s case. Urban Edge Properties (NYSE:UE) is the most popular stock in this table. On the other hand Myriad Genetics, Inc. (NASDAQ:MYGN) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Inovio Pharmaceuticals Inc (NYSE:INO) is even less popular than MYGN. Hedge funds clearly dropped the ball on INO as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on INO as the stock returned 85.8% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.