Hedge Funds Are Coming Back To Bellerophon Therapeutics, Inc. (BLPH)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Bellerophon Therapeutics, Inc. (NASDAQ:BLPH).

Bellerophon Therapeutics, Inc. (NASDAQ:BLPH) investors should pay attention to an increase in enthusiasm from smart money of late. Bellerophon Therapeutics, Inc. (NASDAQ:BLPH) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BLPH 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.

Jeffrey Talpins of Element Capital

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 $24 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. With all of this in mind let’s take a peek at the key hedge fund action surrounding Bellerophon Therapeutics, Inc. (NASDAQ:BLPH).

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

Heading into the second quarter of 2021, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 500% from one quarter earlier. By comparison, 4 hedge funds held shares or bullish call options in BLPH a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Bellerophon Therapeutics, Inc. (NASDAQ:BLPH) was held by Renaissance Technologies, which reported holding $1.2 million worth of stock at the end of December. It was followed by CaaS Capital with a $0.5 million position. Other investors bullish on the company included Tudor Investment Corp, Citadel Investment Group, and Laurion Capital Management. In terms of the portfolio weights assigned to each position Element Capital Management allocated the biggest weight to Bellerophon Therapeutics, Inc. (NASDAQ:BLPH), around 0.01% of its 13F portfolio. CaaS Capital is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to BLPH.

Now, key money managers were breaking ground themselves. CaaS Capital, managed by Frank Fu, assembled the biggest position in Bellerophon Therapeutics, Inc. (NASDAQ:BLPH). CaaS Capital had $0.5 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.1 million investment in the stock during the quarter. The following funds were also among the new BLPH investors: Ken Griffin’s Citadel Investment Group, Benjamin A. Smith’s Laurion Capital Management, and Jeffrey Talpins’s Element Capital Management.

Let’s now review hedge fund activity in other stocks similar to Bellerophon Therapeutics, Inc. (NASDAQ:BLPH). These stocks are Vinco Ventures, Inc. (NASDAQ:BBIG), Alterity Therapeutics Limited (NASDAQ:ATHE), VirTra, Inc. (NASDAQ:VTSI), Ballantyne Strong Inc (NYSE:BTN), Mid-Southern Bancorp, Inc. (NASDAQ:MSVB), ShiftPixy, Inc. (NASDAQ:PIXY), and Virios Therapeutics, Inc. (NASDAQ:VIRI). This group of stocks’ market caps are similar to BLPH’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $2 million in BLPH’s case. VirTra, Inc. (NASDAQ:VTSI) is the most popular stock in this table. On the other hand Vinco Ventures, Inc. (NASDAQ:BBIG) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Bellerophon Therapeutics, Inc. (NASDAQ:BLPH) is more popular among hedge funds. Our overall hedge fund sentiment score for BLPH is 90. 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. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Unfortunately BLPH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BLPH were disappointed as the stock returned 3.7% since the end of the first quarter (through 6/25) 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 since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.