The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Dynavax Technologies Corporation (NASDAQ:DVAX).
Dynavax Technologies Corporation (NASDAQ:DVAX) has seen a decrease in hedge fund interest recently. Our calculations also showed that DVAX 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.
In the 21st century investor’s toolkit there are a large number of formulas market participants put to use to grade their holdings. A duo of the best formulas are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can trounce their index-focused peers by a solid amount (see the details here).
Kris Jenner of Rock Springs Capital Management[/caption]
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. Now we're going to take a peek at the latest hedge fund action surrounding Dynavax Technologies Corporation (NASDAQ:DVAX).
What have hedge funds been doing with Dynavax Technologies Corporation (NASDAQ:DVAX)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -38% from the previous quarter. By comparison, 16 hedge funds held shares or bullish call options in DVAX a year ago. With the smart money's sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of Dynavax Technologies Corporation (NASDAQ:DVAX), with a stake worth $5.8 million reported as of the end of September. Trailing D E Shaw was Rock Springs Capital Management, which amassed a stake valued at $5.6 million. Rhenman & Partners Asset Management, Citadel Investment Group, and Royce & Associates 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 Rhenman & Partners Asset Management allocated the biggest weight to Dynavax Technologies Corporation (NASDAQ:DVAX), around 0.49% of its 13F portfolio. Rock Springs Capital Management is also relatively very bullish on the stock, dishing out 0.23 percent of its 13F equity portfolio to DVAX.
Seeing as Dynavax Technologies Corporation (NASDAQ:DVAX) has experienced a decline in interest from the smart money, logic holds that there exists a select few funds who were dropping their positions entirely in the first quarter. It's worth mentioning that Richard Mashaal's Rima Senvest Management dumped the largest position of the "upper crust" of funds monitored by Insider Monkey, valued at an estimated $22.8 million in stock, and Peter Kolchinsky's RA Capital Management was right behind this move, as the fund sold off about $13.5 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 5 funds in the first quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Dynavax Technologies Corporation (NASDAQ:DVAX) but similarly valued. We will take a look at Ituran Location and Control Ltd. (NASDAQ:ITRN), Gamco Investors Inc. (NYSE:GBL), Sprague Resources LP (NYSE:SRLP), and TCG BDC, Inc. (NASDAQ:CGBD). All of these stocks' market caps are similar to DVAX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ITRN,10,44551,0 GBL,9,4523,0 SRLP,4,18879,1 CGBD,7,14522,0 Average,7.5,20619,0.25 [/table]
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $19 million in DVAX's case. Ituran Location and Control Ltd. (NASDAQ:ITRN) is the most popular stock in this table. On the other hand Sprague Resources LP (NYSE:SRLP) is the least popular one with only 4 bullish hedge fund positions. Dynavax Technologies Corporation (NASDAQ:DVAX) is not the most popular stock in this group but hedge fund interest is still above average. 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 but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on DVAX as the stock returned 70.3% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
