Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) from the perspective of those successful funds.
Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) has seen a decrease in hedge fund interest of late. There were 11 hedge funds in our database with CASC holdings at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Farmers Capital Bank Corp (NASDAQ:FFKT), Verso Corporation (NYSE:VRS), and Adaptimmune Therapeutics PLC – ADR (NASDAQ:ADAP) to gather more data points.
Follow Cascadian Therapeutics Inc. (NASDAQ:CASC)
Follow Cascadian Therapeutics Inc. (NASDAQ:CASC)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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With all of this in mind, we’re going to take a gander at the fresh action regarding Cascadian Therapeutics Inc (USA) (NASDAQ:CASC).
How have hedgies been trading Cascadian Therapeutics Inc (USA) (NASDAQ:CASC)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CASC over the last 5 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Baupost Group, led by Seth Klarman, holds the number one position in Cascadian Therapeutics Inc (USA) (NASDAQ:CASC). Baupost Group has a $41 million position in the stock, comprising 0.6% of its 13F portfolio. The second largest stake is held by Biotechnology Value Fund / BVF Inc, led by Mark Lampert, which holds a $30.8 million position; 5.8% of its 13F portfolio is allocated to the stock. Other peers with similar optimism comprise Behzad Aghazadeh’s venBio Select Advisor, Joseph Edelman’s Perceptive Advisors and Israel Englander’s Millennium Management, one of the 10 largest hedge funds in the world. 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 that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. It’s worth mentioning that Jean-Marie Eveillard’s First Eagle Investment Management said goodbye to the biggest stake of the “upper crust” of funds studied by Insider Monkey, totaling about $0.4 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also cut its stock, about $0.3 million worth.
Let’s also examine hedge fund activity in other stocks similar to Cascadian Therapeutics Inc (USA) (NASDAQ:CASC). We will take a look at Farmers Capital Bank Corp (NASDAQ:FFKT), Verso Corporation (NYSE:VRS), Adaptimmune Therapeutics PLC – ADR (NASDAQ:ADAP), and Daqo New Energy Corp (NYSE:DQ). This group of stocks’ market caps match CASC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FFKT | 3 | 33480 | 0 |
| VRS | 17 | 67775 | 17 |
| ADAP | 12 | 33285 | -2 |
| DQ | 6 | 27543 | 2 |
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $89 million in CASC’s case. Verso Corporation (NYSE:VRS) is the most popular stock in this table. On the other hand Farmers Capital Bank Corp (NASDAQ:FFKT) is the least popular one with only 3 bullish hedge fund positions. Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VRS might be a better candidate to consider taking a long position in.
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Disclosure: None
