The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider ESSA Pharma Inc. (NASDAQ:EPIX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
ESSA Pharma Inc. (NASDAQ:EPIX) was in 28 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. EPIX investors should be aware of an increase in hedge fund sentiment lately. There were 18 hedge funds in our database with EPIX positions at the end of the fourth quarter. Our calculations also showed that EPIX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Robert Atchinson of Adage Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. 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 let’s take a gander at the latest hedge fund action surrounding ESSA Pharma Inc. (NASDAQ:EPIX).
Do Hedge Funds Think EPIX Is A Good Stock To Buy Now?
At first quarter’s end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 56% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EPIX over the last 23 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.
The largest stake in ESSA Pharma Inc. (NASDAQ:EPIX) was held by Biotechnology Value Fund / BVF Inc, which reported holding $84.5 million worth of stock at the end of December. It was followed by Soleus Capital with a $60.1 million position. Other investors bullish on the company included Vivo Capital, Adage Capital Management, and Driehaus Capital. In terms of the portfolio weights assigned to each position Soleus Capital allocated the biggest weight to ESSA Pharma Inc. (NASDAQ:EPIX), around 10.84% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, designating 5.59 percent of its 13F equity portfolio to EPIX.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the largest position in ESSA Pharma Inc. (NASDAQ:EPIX). Adage Capital Management had $39.2 million invested in the company at the end of the quarter. Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management also initiated a $14.6 million position during the quarter. The following funds were also among the new EPIX investors: Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Alan Frazier’s Frazier Healthcare Partners, and Manfred Yu’s Acuta Capital Partners.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as ESSA Pharma Inc. (NASDAQ:EPIX) but similarly valued. These stocks are Mersana Therapeutics, Inc. (NASDAQ:MRSN), Enerplus Corp (NYSE:ERF), Dynavax Technologies Corporation (NASDAQ:DVAX), SecureWorks Corp. (NASDAQ:SCWX), Brookdale Senior Living, Inc. (NYSE:BKD), Avid Bioservices, Inc. (NASDAQ:CDMO), and NOW Inc (NYSE:DNOW). This group of stocks’ market valuations match EPIX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRSN | 25 | 357646 | -5 |
| ERF | 19 | 145392 | 2 |
| DVAX | 14 | 81307 | 0 |
| SCWX | 12 | 20191 | 1 |
| BKD | 23 | 386290 | 4 |
| CDMO | 21 | 140924 | -4 |
| DNOW | 18 | 117523 | -4 |
| Average | 18.9 | 178468 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.9 hedge funds with bullish positions and the average amount invested in these stocks was $178 million. That figure was $400 million in EPIX’s case. Mersana Therapeutics, Inc. (NASDAQ:MRSN) is the most popular stock in this table. On the other hand SecureWorks Corp. (NASDAQ:SCWX) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks ESSA Pharma Inc. (NASDAQ:EPIX) is more popular among hedge funds. Our overall hedge fund sentiment score for EPIX 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 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Unfortunately EPIX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EPIX were disappointed as the stock returned -3% since the end of the first quarter (through 7/9) 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.
Follow Essa Pharma Inc. (NASDAQ:EPIX)
Follow Essa Pharma Inc. (NASDAQ:EPIX)
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Disclosure: None. This article was originally published at Insider Monkey.
