Do Hedge Funds Love Curis, Inc. (CRIS)?

Asma UL Husna

In this article you are going to find out whether hedge funds think Curis, Inc. (NASDAQ:CRIS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is Curis, Inc. (NASDAQ:CRIS) a good investment now? The smart money is getting more optimistic. The number of long hedge fund bets increased by 1 in recent months. Our calculations also showed that CRIS 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). CRIS was in 4 hedge funds' portfolios at the end of March. There were 3 hedge funds in our database with CRIS positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

[caption id="attachment_341400" align="aligncenter" width="399"] Samuel Isaly of OrbiMed Advisors[/caption]

Samuel Isaly Orbimed Advisors

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. With all of this in mind let's take a look at the recent hedge fund action encompassing Curis, Inc. (NASDAQ:CRIS).

Hedge fund activity in Curis, Inc. (NASDAQ:CRIS)

Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in CRIS over the last 18 quarters. With hedge funds' sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the most valuable position in Curis, Inc. (NASDAQ:CRIS), worth close to $1.1 million, amounting to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies's heels is OrbiMed Advisors, managed by Samuel Isaly, which holds a $1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish contain Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position OrbiMed Advisors allocated the biggest weight to Curis, Inc. (NASDAQ:CRIS), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0011 percent of its 13F equity portfolio to CRIS.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into Curis, Inc. (NASDAQ:CRIS) headfirst. Millennium Management, managed by Israel Englander, assembled the largest position in Curis, Inc. (NASDAQ:CRIS). Millennium Management had $0 million invested in the company at the end of the quarter.

Let's also examine hedge fund activity in other stocks similar to Curis, Inc. (NASDAQ:CRIS). These stocks are WVS Financial Corp. (NASDAQ:WVFC), ALJ Regional Holdings, Inc. (NASDAQ:ALJJ), Hudson Global Inc (NASDAQ:HSON), and Ballantyne Strong Inc (NYSE:BTN). All of these stocks' market caps are closest to CRIS's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WVFC,1,1631,0 ALJJ,2,313,0 HSON,1,708,-1 BTN,3,7063,0 Average,1.75,2429,-0.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 1.75 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $2 million in CRIS's case. Ballantyne Strong Inc (NYSE:BTN) is the most popular stock in this table. On the other hand WVS Financial Corp. (NASDAQ:WVFC) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Curis, Inc. (NASDAQ:CRIS) is more popular among hedge funds. 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 managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on CRIS, though not to the same extent, as the stock returned 19.3% in Q2 (through the end of May) and outperformed the market as well.

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

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