Sabby Management is a New Jersey-based activist hedge fund launched by Hal Mintz in June 2011. The investment firm primarily employs an opportunistic and event-driven strategy by focusing on fundamental and quantitative analysis. Sabby Management mainly invests in the healthcare sector, including the biotechnology and pharmaceutical segments, which altogether represent roughly 73% of the fund’s entire public equity portfolio. Hal Mintz’s Sabby Management manages a few funds, including the Sabby Healthcare Volatility Master Fund and the Sabby Volatility Warrant Master Fund. The firm’s 32 long positions on March 31 in stocks with a $1 billion market capitalization returned 8.7% in the second quarter of this year, pushing its year-to-date returns to 56.5% thanks to its exceptional returns in the first quarter. These calculated stock pick returns are only estimates of the fund’s actual performance, and do not include options, bonds, or short positions, so they could differ greatly from a fund’s actual returns. As stated by its most recent 13F filing, Sabby Management oversees a public equity portfolio worth $2.40 billion. In this article we will be discussing some of the fund’s most notable holdings, which include the following companies: Zogenix Inc. (NASDAQ:ZGNX), Mobileye N.V. (NYSE:MBLY), and InterOil Corporation (NYSE:IOC).
We don’t just track the latest moves of hedge funds like Sabby Management. 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 which showed 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, and easily beating the most popular large-cap picks of funds, which nonetheless get the majority of their collective capital. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic only the very best ideas of the best fund managers on your own? Since the beginning of forward testing in August 2012, the Insider Monkey small-cap strategy has outperformed the market every year, returning 139%, nearly 2.5 times greater returns than the S&P 500 during the same period (see more details).
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Sabby Management’s most recent 13F filing reveals that the fund took a long position in Zogenix Inc. (NASDAQ:ZGNX), acquiring a stake of 8.42 million shares, which were worth $11.53 million on March 31. The shares of Zogenix have grown nearly 85% since the beginning of the current year, and over 22% in the second quarter, owing to the company’s impending Phase III clinical study of fenfluramine, which is set to start later this year in Dravet syndrome patients. Following its meeting with Food and Drug Administration regulators, Zogenix intends to file an Investigational New Drug (IND) Process for two Phase III studies of low-dose fenfluramine to assess its ability to limit seizures in Dravet syndrome patients. The enthusiasm of investors around the company’s recent success has sent the stock to new highs this year, but some analysts believe that Zogenix’s stock has even more upside potential (see more details). Within our database, Kevin Kotler’s Broadfin Capital, which is another healthcare-focused hedge fund, represents the largest investor in Zogenix Inc. (NASDAQ:ZGNX), holding 10.74 million shares.
