Were Hedge Funds Right About Harpoon Therapeutics, Inc. (HARP)?

·6 min read

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Harpoon Therapeutics, Inc. (NASDAQ:HARP).

Harpoon Therapeutics, Inc. (NASDAQ:HARP) shareholders have witnessed an increase in support from the world's most elite money managers in recent months. Harpoon Therapeutics, Inc. (NASDAQ:HARP) was in 17 hedge funds' portfolios at the end of March. The all time high for this statistic is 12. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 11 hedge funds in our database with HARP positions at the end of the fourth quarter. Our calculations also showed that HARP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Do Hedge Funds Think HARP Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 55% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in HARP a year ago. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, OrbiMed Advisors has the most valuable position in Harpoon Therapeutics, Inc. (NASDAQ:HARP), worth close to $47.8 million, accounting for 0.4% of its total 13F portfolio. The second most bullish fund manager is Marc Schneidman of Aquilo Capital Management, with a $32.5 million position; the fund has 5.9% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include Jerome Pfund and Michael Sjostrom's Sectoral Asset Management, Bihua Chen's Cormorant Asset Management and Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management. In terms of the portfolio weights assigned to each position Aquilo Capital Management allocated the biggest weight to Harpoon Therapeutics, Inc. (NASDAQ:HARP), around 5.88% of its 13F portfolio. Sectoral Asset Management is also relatively very bullish on the stock, dishing out 1 percent of its 13F equity portfolio to HARP.

As aggregate interest increased, key money managers have jumped into Harpoon Therapeutics, Inc. (NASDAQ:HARP) headfirst. Aquilo Capital Management, managed by Marc Schneidman, created the largest position in Harpoon Therapeutics, Inc. (NASDAQ:HARP). Aquilo Capital Management had $32.5 million invested in the company at the end of the quarter. Jerome Pfund and Michael Sjostrom's Sectoral Asset Management also made a $13.2 million investment in the stock during the quarter. The other funds with brand new HARP positions are Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management, Benjamin A. Smith's Laurion Capital Management, and Arsani William's Logos Capital.

Let's also examine hedge fund activity in other stocks similar to Harpoon Therapeutics, Inc. (NASDAQ:HARP). We will take a look at TORM plc (NASDAQ:TRMD), American Software, Inc. (NASDAQ:AMSWA), Albireo Pharma, Inc. (NASDAQ:ALBO), The RMR Group Inc. (NASDAQ:RMR), Qiwi PLC (NASDAQ:QIWI), Kadmon Holdings, Inc. (NASDAQ:KDMN), and GAN Limited (NASDAQ:GAN). This group of stocks' market valuations are similar to HARP's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRMD,4,494612,1 AMSWA,6,46565,-2 ALBO,15,170627,-2 RMR,16,100223,-1 QIWI,5,18584,-4 KDMN,24,286093,-7 GAN,11,64056,-11 Average,11.6,168680,-3.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.6 hedge funds with bullish positions and the average amount invested in these stocks was $169 million. That figure was $155 million in HARP's case. Kadmon Holdings, Inc. (NASDAQ:KDMN) is the most popular stock in this table. On the other hand TORM plc (NASDAQ:TRMD) is the least popular one with only 4 bullish hedge fund positions. Harpoon Therapeutics, Inc. (NASDAQ:HARP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HARP is 72.5. 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 HARP wasn't nearly as popular as these 5 stocks and hedge funds that were betting on HARP were disappointed as the stock returned -45.1% 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.

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