We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Acer Therapeutics Inc. (NASDAQ:ACER).
Is Acer Therapeutics Inc. (NASDAQ:ACER) a buy, sell, or hold? Prominent investors are in an optimistic mood. The number of bullish hedge fund positions advanced by 2 in recent months. Our calculations also showed that ACER isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). ACER was in 4 hedge funds’ portfolios at the end of September. There were 2 hedge funds in our database with ACER positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are perceived as worthless, old financial vehicles of the past. While there are more than 8000 funds in operation at the moment, Our experts look at the elite of this group, around 750 funds. These hedge fund managers administer bulk of all hedge funds’ total asset base, and by observing their first-class equity investments, Insider Monkey has figured out various investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
David Harding of Winton Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Keeping this in mind let’s analyze the fresh hedge fund action surrounding Acer Therapeutics Inc. (NASDAQ:ACER).
Hedge fund activity in Acer Therapeutics Inc. (NASDAQ:ACER)
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ACER over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, holds the most valuable position in Acer Therapeutics Inc. (NASDAQ:ACER). Nantahala Capital Management has a $3.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Winton Capital Management, led by David Harding, holding a $0.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish encompass John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and . In terms of the portfolio weights assigned to each position Nantahala Capital Management allocated the biggest weight to Acer Therapeutics Inc. (NASDAQ:ACER), around 0.12% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, earmarking 0.001 percent of its 13F equity portfolio to ACER.
As one would reasonably expect, key hedge funds have been driving this bullishness. Winton Capital Management, managed by David Harding, created the biggest position in Acer Therapeutics Inc. (NASDAQ:ACER). Winton Capital Management had $0.1 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.1 million position during the quarter. The only other fund with a brand new ACER position is Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Acer Therapeutics Inc. (NASDAQ:ACER) but similarly valued. We will take a look at Celldex Therapeutics, Inc. (NASDAQ:CLDX), General Moly, Inc. (NYSE:GMO), WVS Financial Corp. (NASDAQ:WVFC), and Wireless Telecom Group, Inc. (NYSE:WTT). This group of stocks’ market valuations are closest to ACER’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLDX | 4 | 2337 | 1 |
| GMO | 1 | 80 | 0 |
| WVFC | 1 | 1828 | 0 |
| WTT | 1 | 1460 | 0 |
| Average | 1.75 | 1426 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.75 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $3 million in ACER’s case. Celldex Therapeutics, Inc. (NASDAQ:CLDX) is the most popular stock in this table. On the other hand General Moly, Inc. (NYSE:GMO) is the least popular one with only 1 bullish hedge fund positions. Acer Therapeutics Inc. (NASDAQ:ACER) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on ACER, though not to the same extent, as the stock returned 9.1% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
