Is Humanigen, Inc. (HGEN) A Good Stock To Buy?

Asma UL Husna
·6 min read

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Humanigen, Inc. (NASDAQ:HGEN).

Is Humanigen, Inc. (NASDAQ:HGEN) a stock to buy? Investors who are in the know were in an optimistic mood. The number of bullish hedge fund positions advanced by 6 recently. Humanigen, Inc. (NASDAQ:HGEN) was in 6 hedge funds' portfolios at the end of September. Our calculations also showed that HGEN isn't among the 30 most popular stocks among hedge funds (click for Q3 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.

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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 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.

Steven Cohen of Point72 Asset Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind we're going to take a peek at the latest hedge fund action regarding Humanigen, Inc. (NASDAQ:HGEN).

How have hedgies been trading Humanigen, Inc. (NASDAQ:HGEN)?

At Q3's end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6 from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in HGEN a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Christopher R. Hansen's Valiant Capital has the biggest position in Humanigen, Inc. (NASDAQ:HGEN), worth close to $75.3 million, corresponding to 3.9% of its total 13F portfolio. Sitting at the No. 2 spot is Shashin Shah of Think Investments, with a $14.2 million position; 2.6% of its 13F portfolio is allocated to the stock. Other peers with similar optimism comprise Ken Griffin's Citadel Investment Group, Steve Cohen's Point72 Asset Management and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Valiant Capital allocated the biggest weight to Humanigen, Inc. (NASDAQ:HGEN), around 3.93% of its 13F portfolio. Think Investments is also relatively very bullish on the stock, earmarking 2.63 percent of its 13F equity portfolio to HGEN.

Now, some big names have jumped into Humanigen, Inc. (NASDAQ:HGEN) headfirst. Valiant Capital, managed by Christopher R. Hansen, initiated the largest position in Humanigen, Inc. (NASDAQ:HGEN). Valiant Capital had $75.3 million invested in the company at the end of the quarter. Shashin Shah's Think Investments also made a $14.2 million investment in the stock during the quarter. The other funds with brand new HGEN positions are Ken Griffin's Citadel Investment Group, Steve Cohen's Point72 Asset Management, and Israel Englander's Millennium Management.

Let's also examine hedge fund activity in other stocks similar to Humanigen, Inc. (NASDAQ:HGEN). These stocks are International Money Express, Inc. (NASDAQ:IMXI), Molecular Templates, Inc. (NASDAQ:MTEM), Endeavour Silver Corp. (NYSE:EXK), Harmonic Inc (NASDAQ:HLIT), Oyster Point Pharma, Inc. (NASDAQ:OYST), Forte Biosciences, Inc. (NASDAQ:FBRX), and Cars.com, LLC (NYSE:CARS). This group of stocks' market values are closest to HGEN's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IMXI,17,110061,4 MTEM,22,116386,-1 EXK,7,11904,0 HLIT,15,75193,0 OYST,14,19641,0 FBRX,6,72274,4 CARS,22,133586,1 Average,14.7,77006,1.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $110 million in HGEN's case. Molecular Templates, Inc. (NASDAQ:MTEM) is the most popular stock in this table. On the other hand Forte Biosciences, Inc. (NASDAQ:FBRX) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Humanigen, Inc. (NASDAQ:HGEN) is even less popular than FBRX. Our overall hedge fund sentiment score for HGEN is 10. 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. Hedge funds dodged a bullet by taking a bearish stance towards HGEN. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th but managed to beat the market again by 16.1 percentage points. Unfortunately HGEN wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); HGEN investors were disappointed as the stock returned -10.3% since the end of the third quarter (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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

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