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. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) investors should pay attention to an increase in support from the world’s most elite money managers lately. SNDX was in 8 hedge funds’ portfolios at the end of June. There were 7 hedge funds in our database with SNDX positions at the end of the previous quarter. Our calculations also showed that SNDX isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. Let’s take a look at the fresh hedge fund action encompassing Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX).
What does smart money think about Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX)?
At Q2’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SNDX over the last 16 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Biotechnology Value Fund / BVF Inc was the largest shareholder of Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX), with a stake worth $16.4 million reported as of the end of March. Trailing Biotechnology Value Fund / BVF Inc was 683 Capital Partners, which amassed a stake valued at $15 million. Adage Capital Management, Renaissance Technologies, and OrbiMed Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, some big names were breaking ground themselves. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, initiated the most outsized position in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX). Algert Coldiron Investors had $0.1 million invested in the company at the end of the quarter. Parvinder Thiara’s Athanor Capital also made a $0.1 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX). We will take a look at Covia Holdings Corporation (NYSE:CVIA), Urovant Sciences Ltd. (NASDAQ:UROV), Silicom Ltd. (NASDAQ:SILC), and SeaSpine Holdings Corporation (NASDAQ:SPNE). This group of stocks’ market caps are closest to SNDX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVIA | 7 | 19101 | 2 |
| UROV | 8 | 33755 | -1 |
| SILC | 5 | 9207 | -3 |
| SPNE | 7 | 15225 | -1 |
| Average | 6.75 | 19322 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $52 million in SNDX’s case. Urovant Sciences Ltd. (NASDAQ:UROV) is the most popular stock in this table. On the other hand Silicom Ltd. (NASDAQ:SILC) is the least popular one with only 5 bullish hedge fund positions. Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SNDX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SNDX were disappointed as the stock returned -19.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
