At Insider Monkey, we track over 700 of the top hedge funds in the world, following and reporting on their latest moves disclosed through filings with the Securities and Exchange Commission on a daily basis. In this article we will cover three recent filings, involving three different funds and three different companies. Therefore, in the filings, Alex Denner’s Sarissa Capital, Glenn J. Krevlin’s (pictured) Glenhill Advisors, and Wayne Holman’s Ridgeback Capital Management. The companies in question are a trio of firms operating in the health sector, Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR), Joint Corp (NASDAQ:JYNT), and Trillium Therapeutics Inc. (NASDAQ:TRIL).
However, we don’t just track the latest moves of funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testsing August, 2012, the strategy worked splendidly, outperforming the market every year and returning 132% through March 11, which is by 79 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
We’ll start with Sarissa Capital and Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR). A recent filing detailed an agreement between the investor and the company, which involves the appointment of a new independent director to Aegerion’s Board of Directors, increasing its total membership to eight members. The agreement also allows Sarissa to appoint an additional class II director to the board at any time between January 2016 and two days following the company’s 2016 Annual Meeting of shareholders.
The deal and participation on the board are contingent upon Sarissa maintaining ownership of at least 1.20 million shares of Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR). Sarissa reported ownership of 1.64 million shares in a filing in early February, which was a new position for the activist fund and amounted to 5.76% of the company’s common stock. Matt Sirovich and Jeremy Mindich’s Scopia Capital is the largest shareholder among the funds we track, owning 5.35 million shares. Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)’s stock has collapsed by nearly 75% from their peak in late 2013 and are down 26% over the past six months. The brunt of that loss occurred on October 31 after a weak earnings report and reduced full-year guidance crippled shares by 40%.
The next filing is related to Glenhill Advisors and Joint Corp (NASDAQ:JYNT), which went public late in 2014. Glenhill filed a Form 4 as an insider of the company because of its position as a large shareholder, disclosing that in separate transactions on March 30 and 31, it acquired an additional 2,289 shares at an average price of about $7.36 per unit. The transactions brought its total share ownership up to 1.21 million shares. Overall, since the beginning of the year, the investor added around 60,000 shares to its stake, through several smaller transactions.
Joint Corp (NASDAQ:JYNT), which franchises chiropractic clinics which utilize a cash-based as opposed to insurance-based transaction model, is enjoying a strong 2015, with shares rising by 23% year-to-date. The company plans to open both corporate and franchised clinics in 2015 and is forecasting a 100% increase in revenue. Charles Paquelet’s Skylands Capital is the largest shareholder after Glenhill Advisors among the funds we track, reporting ownership of 186,400 shares as of the end of 2014.
Lastly, we come to Ridgeback Capital Management and its new investment in Trillium Therapeutics Inc. (NASDAQ:TRIL). Ridgeback has been a mostly inactive fund over the past two years in terms of its equity portfolio, closing most of its long positions by the end of 2012, and in several 13Fs during the past two years it didn’t report any long positions. In its latest 13F, it disclosed just one long position in Applied Genetic Technologies Corp (NASDAQ:AGTC). Its most recent filing details a new position of 451,900 shares in Trillium, a 6.9% stake in the company. The stake doesn’t include more than 830,000 additional shares underlying currently convertible preferred stock and warrants. Those securities cannot be converted in the event they would push the ownership of the reporting person above 4.99%.
In November, Trillium Therapeutics Inc. (NASDAQ:TRIL) executed a reverse stock split that reduced its number of outstanding shares to 4.31 million from 129.22 million, to comply with the NASDAQ’s minimum share price requirement. The reverse split hiked the value of Trillium’s shares to $8.69 from $0.28. Since then the stock has been gaining ground, soaring by nearly 200% to $25.35. More significantly, the stock appreciated since the beginning of 2015, posting a 50% gain over the past five trading days alone. The Canadian biopharmacuetical company is working on novel cancer treatments, with two programs in the pre-clinical phase. James A. Silverman’s Opaleye Management was previously the largest shareholder among the funds we track, reporting ownership of 333,333 shares in its latest 13F filing.
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