Does TCR2 Therapeutics Inc. (NASDAQ:TCRR) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Is TCR2 Therapeutics Inc. (NASDAQ:TCRR) going to take off soon? According to the statistics compiled by hedge fund tracking site Insider Monkey, the smart money is selling. The number of bullish hedge fund positions were trimmed by 1 in recent months. Their calculations also showed that TCRR isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
We’re going to take a look at the fresh hedge fund action surrounding TCR2 Therapeutics Inc. (NASDAQ:TCRR).
Hedge fund activity in TCR2 Therapeutics Inc. (NASDAQ:TCRR)
Heading into the third quarter of 2019, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the previous quarter. On the other hand, there were a total of zero hedge funds with a bullish position in TCRR a year ago. That’s because TCR started trading in February of 2019 at an initial price of $16 per share. TCRR shares return around 6% since then.
Of the funds tracked by Insider Monkey, Redmile Group, managed by Jeremy Green, holds the largest position in TCR2 Therapeutics Inc. (NASDAQ:TCRR). Redmile Group has a $25.7 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Hillhouse Capital Management, managed by Lei Zhang, which holds a $4.6 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions consist of Israel Englander’s Millennium Management and Oleg Nodelman’s EcoR1 Capital. Millennium’s position isn’t very important but Oleg Nodelman is known to be an excellent biotech investor.
Due to the fact that TCR2 Therapeutics Inc. (NASDAQ:TCRR) has faced declining sentiment from hedge fund managers, logic holds that there exists a select few hedgies who sold off their entire stakes by the end of the second quarter. Interestingly, Michael Platt and William Reeves’s BlueCrest Capital Mgmt. dropped the largest position of all the hedgies watched by Insider Monkey, comprising about $0.5 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also sold off its stock, about $0.4 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks similar to TCR2 Therapeutics Inc. (NASDAQ:TCRR). These stocks are Kindred Biosciences Inc (NASDAQ:KIN), Cadiz Inc (NASDAQ:CDZI), Community Health Systems (NYSE:CYH), and Lumber Liquidators Holdings Inc (NYSE:LL). This group of stocks’ market caps are similar to TCRR’s market cap.
[table]
Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position
KIN,9,110093,-1
CDZI,9,54561,2
CYH,13,40511,-5
LL,13,42111,5
Average,11,61819,0.25
[/table]
As it can be seen from the table (each comma separates the columns) these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $33 million in TCRR’s case. Community Health Systems (NYSE:CYH) is the most popular stock in this table. On the other hand Kindred Biosciences Inc (NASDAQ:KIN) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks TCR2 Therapeutics Inc. (NASDAQ:TCRR) is even less popular than KIN. Insider Monkey’s calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on TCRR, though not to the same extent, as the stock returned 5% during the third quarter and outperformed the market as well.
Disclosure: No positions. Data and article – courtesy of Insider Monkey.
