Hedge Fund Sentiment Is Stagnant On Bellicum Pharmaceuticals Inc (BLCM)

A market correction in the third quarter, spurred by a number of global macroeconomic concerns ended up having a negative impact on the markets and many hedge funds as a result. The stocks of smaller companies were especially hard hit during this time as investors fled to investments seen as being safer. This is evident in the fact that the Russell 2000 ETF underperformed the S&P 500 ETF by 14 percentage points between June 25 and the end of October. We also received indications that hedge funds were trimming their positions amid the market volatility and uncertainty, and given their greater inclination towards smaller cap stocks than other investors, it follows that a stronger sell-off occurred in those stocks. Let’s study the hedge fund sentiment to see how those concerns affected their ownership of Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) during the quarter.

Hedge fund interest in Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare BLCM to other stocks, including Ruby Tuesday, Inc. (NYSE:RT), Peabody Energy Corporation (NYSE:BTU), and Oriental Financial Group Inc. (NYSE:OFG) to get a better sense of its popularity.

According to most market participants, hedge funds are viewed as unimportant, old investment vehicles of years past. While there are more than 8000 funds in operation at present, Our experts hone in on the bigwigs of this group, around 700 funds. Most estimates calculate that this group of people handle most of the hedge fund industry’s total capital, and by following their matchless stock picks, Insider Monkey has formulated various investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, we’re going to check out the fresh action regarding Bellicum Pharmaceuticals Inc (NASDAQ:BLCM).

What does the smart money think about Bellicum Pharmaceuticals Inc (NASDAQ:BLCM)?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the number one position in Bellicum Pharmaceuticals Inc (NASDAQ:BLCM). The fund has a $60.9 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $14.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions encompass Ken Griffin’s Citadel Investment Group, Joseph Edelman’s Perceptive Advisors and Daniel Gold’s QVT Financial.

Because Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) has witnessed falling interest from the smart money, it’s easy to see that there was a specific group of fund managers who sold off their positions entirely by the end of the third quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management dumped the largest position of the 700 funds monitored by Insider Monkey, valued at an estimated $10.7 million, and Behzad Aghazadeh’s venBio Select Advisor was right behind this move, as the fund dropped about $5.6 million worth of BLCM shares. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Bellicum Pharmaceuticals Inc (NASDAQ:BLCM). We will take a look at Ruby Tuesday, Inc. (NYSE:RT), Peabody Energy Corporation (NYSE:BTU), Oriental Financial Group Inc. (NYSE:OFG), and CEVA, Inc. (NASDAQ:CEVA). This group of stocks’ market valuations resemble BLCM’s market valuation.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $117 million in BLCM’s case. Ruby Tuesday, Inc. (NYSE:RT) is the most popular stock in this table. On the other hand CEVA, Inc. (NASDAQ:CEVA) is the least popular one with only 11 bullish hedge fund positions. Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RT might be a better candidate to consider a long position.