Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Adamas Pharmaceuticals Inc (NASDAQ:ADMS).
Adamas Pharmaceuticals Inc (NASDAQ:ADMS) was in 18 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 20. ADMS has experienced an increase in enthusiasm from smart money recently. There were 13 hedge funds in our database with ADMS positions at the end of the fourth quarter. Our calculations also showed that ADMS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Roger Ibbotson of Zebra Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. With all of this in mind let’s take a peek at the latest hedge fund action surrounding Adamas Pharmaceuticals Inc (NASDAQ:ADMS).
Do Hedge Funds Think ADMS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ADMS over the last 23 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in Adamas Pharmaceuticals Inc (NASDAQ:ADMS) was held by Armistice Capital, which reported holding $18.5 million worth of stock at the end of December. It was followed by Stonepine Capital with a $16.4 million position. Other investors bullish on the company included AIGH Investment Partners, Opaleye Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Stonepine Capital allocated the biggest weight to Adamas Pharmaceuticals Inc (NASDAQ:ADMS), around 8.86% of its 13F portfolio. AIGH Investment Partners is also relatively very bullish on the stock, earmarking 2.23 percent of its 13F equity portfolio to ADMS.
As one would reasonably expect, key money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, assembled the biggest position in Adamas Pharmaceuticals Inc (NASDAQ:ADMS). Millennium Management had $0.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new ADMS investors: Michael Gelband’s ExodusPoint Capital, Roger Ibbotson’s Zebra Capital Management, and Andre F. Perold’s HighVista Strategies.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Adamas Pharmaceuticals Inc (NASDAQ:ADMS) but similarly valued. We will take a look at HyreCar Inc. (NASDAQ:HYRE), First Western Financial, Inc. (NASDAQ:MYFW), EMCORE Corporation (NASDAQ:EMKR), Oncolytics Biotech, Inc. (NASDAQ:ONCY), Natural Resource Partners LP (NYSE:NRP), Level One Bancorp, Inc. (NASDAQ:LEVL), and Gold Resource Corporation (NYSE:GORO). This group of stocks’ market caps resemble ADMS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HYRE | 16 | 52504 | 2 |
| MYFW | 3 | 10421 | 0 |
| EMKR | 19 | 62826 | 4 |
| ONCY | 2 | 542 | -1 |
| NRP | 1 | 9040 | 0 |
| LEVL | 3 | 1160 | 1 |
| GORO | 6 | 2110 | -1 |
| Average | 7.1 | 19800 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.1 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $67 million in ADMS’s case. EMCORE Corporation (NASDAQ:EMKR) is the most popular stock in this table. On the other hand Natural Resource Partners LP (NYSE:NRP) is the least popular one with only 1 bullish hedge fund positions. Adamas Pharmaceuticals Inc (NASDAQ:ADMS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ADMS is 84.2. 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 ADMS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ADMS were disappointed as the stock returned 2.9% 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.
Follow Adamas Pharmaceuticals Inc (NASDAQ:ADMS)
Follow Adamas Pharmaceuticals Inc (NASDAQ:ADMS)
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Disclosure: None. This article was originally published at Insider Monkey.
