Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually, their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Karyopharm Therapeutics Inc (NASDAQ:KPTI).
Karyopharm Therapeutics Inc (NASDAQ:KPTI) was in 11 hedge funds’ portfolios at the end of September. KPTI investors should pay attention to an increase in hedge fund sentiment lately. There were 10 hedge funds in our database with KPTI positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Davids Tea Inc (NASDAQ:DTEA), NewStar Financial Inc (NASDAQ:NEWS), and Resource Capital Corp. (NYSE:RSO) to gather more data points.
Follow Karyopharm Therapeutics Inc. (NASDAQ:KPTI)
Follow Karyopharm Therapeutics Inc. (NASDAQ:KPTI)
In today’s marketplace there are a lot of tools stock market investors put to use to analyze stocks. A couple of the best tools are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can beat the broader indices by a solid margin (see the details here).
Keeping this in mind, we’re going to check out the recent action regarding Karyopharm Therapeutics Inc (NASDAQ:KPTI).
Hedge fund activity in Karyopharm Therapeutics Inc (NASDAQ:KPTI)
Heading into Q4, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, William Leland Edwards’s Palo Alto Investors has the largest position in Karyopharm Therapeutics Inc (NASDAQ:KPTI), worth close to $32.5 million, comprising 1.6% of its total 13F portfolio. On Palo Alto Investors’s heels is Israel Englander’s Millennium Management, with a $10.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. The remaining members of the smart money that hold long positions comprise Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Ken Griffin’s Citadel Investment Group, and Bihua Chen’s Cormorant Asset Management.
Now, some big names have jumped into Karyopharm Therapeutics Inc (NASDAQ:KPTI) headfirst. D E Shaw, managed by D. E. Shaw, established the biggest position in Karyopharm Therapeutics Inc (NASDAQ:KPTI). D E Shaw had $0.5 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $0.4 million position during the quarter. The other funds with brand new KPTI positions are Matthew Hulsizer’s PEAK6 Capital Management and Dmitry Balyasny’s Balyasny Asset Management.
Let’s go over hedge fund activity in other stocks similar to Karyopharm Therapeutics Inc (NASDAQ:KPTI). We will take a look at Davids Tea Inc (NASDAQ:DTEA), NewStar Financial Inc (NASDAQ:NEWS), Resource Capital Corp. (NYSE:RSO), and Univest Corp. of PA (NASDAQ:UVSP). This group of stocks’ market values match KPTI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DTEA | 4 | 2238 | -3 |
| NEWS | 8 | 108742 | 1 |
| RSO | 7 | 7715 | -4 |
| UVSP | 5 | 6205 | -1 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $65 million in KPTI’s case. NewStar Financial Inc (NASDAQ:NEWS) is the most popular stock in this table with a total of eight funds reporting long positions. On the other hand, Davids Tea Inc (NASDAQ:DTEA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Karyopharm Therapeutics Inc (NASDAQ:KPTI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
