Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) changed recently.
Is LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) a buy right now? The best stock pickers were getting more bullish. The number of long hedge fund bets rose by 12 recently. LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LPTX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
James E. Flynn of Deerfield Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s go over the latest hedge fund action encompassing LEAP THERAPEUTICS, INC. (NASDAQ:LPTX).
Do Hedge Funds Think LPTX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 133% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in LPTX a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) was held by Perceptive Advisors, which reported holding $34 million worth of stock at the end of September. It was followed by Deerfield Management with a $16 million position. Other investors bullish on the company included Rock Springs Capital Management, Tang Capital Management, and Tri Locum Partners. In terms of the portfolio weights assigned to each position Tri Locum Partners allocated the biggest weight to LEAP THERAPEUTICS, INC. (NASDAQ:LPTX), around 2.89% of its 13F portfolio. Tang Capital Management is also relatively very bullish on the stock, dishing out 2.08 percent of its 13F equity portfolio to LPTX.
As industrywide interest jumped, specific money managers have jumped into LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) headfirst. Deerfield Management, managed by James E. Flynn, established the biggest position in LEAP THERAPEUTICS, INC. (NASDAQ:LPTX). Deerfield Management had $16 million invested in the company at the end of the quarter. Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management also made a $14.1 million investment in the stock during the quarter. The following funds were also among the new LPTX investors: Kevin C. Tang’s Tang Capital Management, Prashanth Jayaram’s Tri Locum Partners, and Ken Greenberg and David Kim’s Ghost Tree Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) but similarly valued. These stocks are Athira Pharma, Inc. (NASDAQ:ATHA), Silverback Therapeutics, Inc. (NASDAQ:SBTX), Sphere 3D Corp. (NASDAQ:ANY), Eros STX Global Corporation (NYSE:ESGC), Information Services Group, Inc. (NASDAQ:III), Cybin Inc. (NYSE:CYBN), and Biomea Fusion Inc. (NASDAQ:BMEA). This group of stocks’ market valuations are similar to LPTX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATHA | 15 | 82844 | -2 |
| SBTX | 17 | 154936 | -2 |
| ANY | 4 | 1635 | 2 |
| ESGC | 7 | 12513 | -3 |
| III | 18 | 72178 | 0 |
| CYBN | 4 | 42694 | 4 |
| BMEA | 7 | 81202 | 7 |
| Average | 10.3 | 64000 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $115 million in LPTX’s case. Information Services Group, Inc. (NASDAQ:III) is the most popular stock in this table. On the other hand Sphere 3D Corp. (NASDAQ:ANY) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) is more popular among hedge funds. Our overall hedge fund sentiment score for LPTX 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately LPTX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LPTX were disappointed as the stock returned -19.2% since the end of the third quarter (through 12/31) 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.
