Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Caladrius Biosciences Inc (NASDAQ:CLBS).
Is Caladrius Biosciences Inc (NASDAQ:CLBS) an outstanding investment now? Prominent investors were in an optimistic mood. The number of long hedge fund positions inched up by 2 recently. Caladrius Biosciences Inc (NASDAQ:CLBS) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 6. Our calculations also showed that CLBS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 S&P 500 ETFs by 115 percentage points since March 2017 (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.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a gander at the recent hedge fund action surrounding Caladrius Biosciences Inc (NASDAQ:CLBS).
Do Hedge Funds Think CLBS Is A Good Stock To Buy Now?
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the previous quarter. By comparison, 1 hedge funds held shares or bullish call options in CLBS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Caladrius Biosciences Inc (NASDAQ:CLBS), with a stake worth $2.8 million reported as of the end of March. Trailing Renaissance Technologies was Sabby Capital, which amassed a stake valued at $0.9 million. Citadel Investment Group, Millennium Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Caladrius Biosciences Inc (NASDAQ:CLBS), around 0.18% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0035 percent of its 13F equity portfolio to CLBS.
Now, key hedge funds have been driving this bullishness. Sabby Capital, managed by Hal Mintz, assembled the largest position in Caladrius Biosciences Inc (NASDAQ:CLBS). Sabby Capital had $0.9 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.
Let’s check out hedge fund activity in other stocks similar to Caladrius Biosciences Inc (NASDAQ:CLBS). These stocks are Allied Esports Entertainment, Inc. (NASDAQ:AESE), Regulus Therapeutics Inc (NASDAQ:RGLS), Beyond Air, Inc. (NASDAQ:XAIR), Evolution Petroleum Corporation (NYSE:EPM), Blue Apron Holdings, Inc. (NYSE:APRN), LEAP THERAPEUTICS, INC. (NASDAQ:LPTX), and Broadwind Inc. (NASDAQ:BWEN). All of these stocks’ market caps resemble CLBS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AESE | 2 | 414 | 0 |
| RGLS | 6 | 14908 | 2 |
| XAIR | 5 | 6015 | 1 |
| EPM | 9 | 10311 | -1 |
| APRN | 9 | 3349 | 1 |
| LPTX | 10 | 28533 | -2 |
| BWEN | 3 | 3781 | -1 |
| Average | 6.3 | 9616 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.3 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $4 million in CLBS’s case. LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) is the most popular stock in this table. On the other hand Allied Esports Entertainment, Inc. (NASDAQ:AESE) is the least popular one with only 2 bullish hedge fund positions. Caladrius Biosciences Inc (NASDAQ:CLBS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CLBS is 50.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately CLBS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CLBS investors were disappointed as the stock returned -19.2% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
