Hedge Funds Are Buying VBI Vaccines, Inc. (VBIV)

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 VBI Vaccines, Inc. (NASDAQ:VBIV).

Is VBI Vaccines, Inc. (NASDAQ:VBIV) a safe stock to buy now? The smart money was in a bullish mood. The number of bullish hedge fund bets went up by 3 in recent months. VBI Vaccines, Inc. (NASDAQ:VBIV) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 11. Our calculations also showed that VBIV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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 S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 review the latest hedge fund action regarding VBI Vaccines, Inc. (NASDAQ:VBIV).

Do Hedge Funds Think VBIV Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 43% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VBIV over the last 24 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Perceptive Advisors was the largest shareholder of VBI Vaccines, Inc. (NASDAQ:VBIV), with a stake worth $184.4 million reported as of the end of June. Trailing Perceptive Advisors was Citadel Investment Group, which amassed a stake valued at $6.5 million. Millennium Management, Citadel Investment Group, and Schonfeld Strategic Advisors 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 Perceptive Advisors allocated the biggest weight to VBI Vaccines, Inc. (NASDAQ:VBIV), around 2.39% of its 13F portfolio. HighVista Strategies is also relatively very bullish on the stock, setting aside 0.07 percent of its 13F equity portfolio to VBIV.

As one would reasonably expect, some big names were leading the bulls’ herd. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), created the most valuable position in VBI Vaccines, Inc. (NASDAQ:VBIV). Schonfeld Strategic Advisors had $0.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $0.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Greg Eisner’s Engineers Gate Manager.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as VBI Vaccines, Inc. (NASDAQ:VBIV) but similarly valued. These stocks are The Manitowoc Company, Inc. (NYSE:MTW), Aspen Aerogels Inc (NYSE:ASPN), Epizyme Inc (NASDAQ:EPZM), Mitek Systems, Inc. (NASDAQ:MITK), Neenah Inc. (NYSE:NP), Pampa Energia S.A. (NYSE:PAM), and Partner Communications Company Ltd (NASDAQ:PTNR). This group of stocks’ market caps resemble VBIV’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.9 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $195 million in VBIV’s case. Aspen Aerogels Inc (NYSE:ASPN) is the most popular stock in this table. On the other hand Partner Communications Company Ltd (NASDAQ:PTNR) is the least popular one with only 1 bullish hedge fund positions. VBI Vaccines, Inc. (NASDAQ:VBIV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VBIV is 59. 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately VBIV wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); VBIV investors were disappointed as the stock returned 1.8% since the end of June (through 9/27) 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.