After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards SIGA Technologies Inc. (NASDAQ:SIGA).
SIGA Technologies Inc. (NASDAQ:SIGA) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. Our calculations also showed that SIGA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Roger Ibbotson of Zebra 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 based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let’s analyze the recent hedge fund action regarding SIGA Technologies Inc. (NASDAQ:SIGA).
How are hedge funds trading SIGA Technologies Inc. (NASDAQ:SIGA)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2019. On the other hand, there were a total of 9 hedge funds with a bullish position in SIGA a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jet Capital Investors, managed by Matthew Mark, holds the biggest position in SIGA Technologies Inc. (NASDAQ:SIGA). Jet Capital Investors has a $13.2 million position in the stock, comprising 2.8% of its 13F portfolio. On Jet Capital Investors’s heels is Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, which holds a $9.2 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions contain Roger Ibbotson’s Zebra Capital Management, Renaissance Technologies and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Jet Capital Investors allocated the biggest weight to SIGA Technologies Inc. (NASDAQ:SIGA), around 2.8% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 1.29 percent of its 13F equity portfolio to SIGA.
Consequently, key money managers have jumped into SIGA Technologies Inc. (NASDAQ:SIGA) headfirst. MFP Investors, managed by Michael Price, established the most valuable position in SIGA Technologies Inc. (NASDAQ:SIGA). MFP Investors had $0.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.1 million position during the quarter. The following funds were also among the new SIGA investors: Michael Gelband’s ExodusPoint Capital and David E. Shaw’s D E Shaw.
Let’s now review hedge fund activity in other stocks similar to SIGA Technologies Inc. (NASDAQ:SIGA). We will take a look at Cutera, Inc. (NASDAQ:CUTR), Intra-Cellular Therapies Inc (NASDAQ:ITCI), New Frontier Corporation (NYSE:NFC), and Chuy’s Holdings Inc (NASDAQ:CHUY). This group of stocks’ market valuations are closest to SIGA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CUTR | 13 | 97437 | 3 |
| ITCI | 11 | 33556 | 0 |
| NFC | 13 | 71506 | 1 |
| CHUY | 10 | 27713 | -2 |
| Average | 11.75 | 57553 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $27 million in SIGA’s case. Cutera, Inc. (NASDAQ:CUTR) is the most popular stock in this table. On the other hand Chuy’s Holdings Inc (NASDAQ:CHUY) is the least popular one with only 10 bullish hedge fund positions. SIGA Technologies Inc. (NASDAQ:SIGA) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SIGA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SIGA were disappointed as the stock returned -4.3% during the fourth quarter (through the end of November) 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.
