It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Neuroderm Ltd (NASDAQ:NDRM) .
Neuroderm Ltd (NASDAQ:NDRM) has experienced an increase in support from the world’s most successful money managers of late. NDRM was in 16 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with NDRM holdings at the end of the previous quarter. At the end of this article we will also compare NDRM to other stocks including Ares Commercial Real Estate Corp (NYSE:ACRE), Bank Mutual Corporation (NASDAQ:BKMU), and Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What have hedge funds been doing with Neuroderm Ltd (NASDAQ:NDRM)?
Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 14% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards NDRM over the last 5 quarters. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Scopia Capital, led by Matt Sirovich and Jeremy Mindich, holds the biggest position in Neuroderm Ltd (NASDAQ:NDRM). Scopia Capital has a $62.6 million position in the stock, comprising 1.1% of its 13F portfolio. On Scopia Capital’s heels is Redmile Group, led by Jeremy Green, which holds a $14.9 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism comprise Behzad Aghazadeh’s venBio Select Advisor, Julian Baker and Felix Baker’s Baker Bros. Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now, some big names have jumped into Neuroderm Ltd (NASDAQ:NDRM) headfirst. Adage Capital Management, led by Phill Gross and Robert Atchinson, created the most outsized position in Neuroderm Ltd (NASDAQ:NDRM). Adage Capital Management had $5.1 million invested in the company at the end of the quarter. Ken Greenberg and David Kim’s Ghost Tree Capital also made a $2.4 million investment in the stock during the quarter. The only other fund with a brand new NDRM position is Ori Hershkovitz’s Nexthera Capital.
Let’s also examine hedge fund activity in other stocks similar to Neuroderm Ltd (NASDAQ:NDRM). These stocks are Ares Commercial Real Estate Corp (NYSE:ACRE), Bank Mutual Corporation (NASDAQ:BKMU), Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), and Mechel OAO (ADR) (NYSE:MTL). This group of stocks’ market values are similar to NDRM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACRE | 10 | 9905 | 2 |
| BKMU | 6 | 15669 | 0 |
| BLCM | 3 | 104833 | -1 |
| MTL | 3 | 1299 | 0 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $121 million in NDRM’s case. Ares Commercial Real Estate Corp (NYSE:ACRE) is the most popular stock in this table. On the other hand Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Neuroderm Ltd (NASDAQ:NDRM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
