Hedge Funds Are Dumping Lantheus Holdings Inc (LNTH)

Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30, 2015. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about Lantheus Holdings Inc (NASDAQ:LNTH).

Is Lantheus Holdings a buy, sell, or hold? Prominent investors are in a pessimistic mood. The number of long hedge fund bets decreased by 1 in recent months. LNTH was in 4 hedge funds’ portfolios at the end of the third quarter of 2015. There were 5 hedge funds in our database with LNTH positions at the end of the previous quarter. At the end of this article we will also compare LNTH to other stocks, including Abeona Therapeutics Inc (NASDAQ:ABEO), Fenix Parts Inc (NASDAQ:FENX), and Planar Systems, Inc. (NASDAQ:PLNR) to get a better sense of its popularity.

In the eyes of most traders, hedge funds are seen as unimportant, outdated financial vehicles of years past. While there are over 8000 funds trading at present, Our experts choose to focus on the crème de la crème of this group, about 700 funds. Most estimates calculate that this group of people oversee the lion’s share of all hedge funds’ total capital, and by observing their inimitable investments, Insider Monkey has figured out several investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Keeping this in mind, let’s take a look at the key action encompassing Lantheus Holdings Inc (NASDAQ:LNTH).

Hedge fund activity in Lantheus Holdings Inc (NASDAQ:LNTH)

Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, holds the most valuable position in Lantheus Holdings Inc (NASDAQ:LNTH). Scopia Capital has a $8.3 million position in the stock, comprising 0.2% of its 13F portfolio. On Scopia Capital’s heels is Tamarack Capital Management, led by Justin John Ferayorni, holding a $2.6 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining peers that are bullish contain Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

Judging by the fact that Lantheus Holdings Inc (NASDAQ:LNTH) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of fund managers that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group dumped the biggest investment of the 700 funds monitored by Insider Monkey, totaling close to $0.5 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also sold off its stock, about $0 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Lantheus Holdings Inc (NASDAQ:LNTH) but similarly valued. We will take a look at Abeona Therapeutics Inc (NASDAQ:ABEO), Fenix Parts Inc (NASDAQ:FENX), Planar Systems, Inc. (NASDAQ:PLNR), and JMP Group Inc. (NYSE:JMP). This group of stocks’ market values are closest to LNTH’s market value.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $22 million, compared $11 million in LNTH’s case. Planar Systems, Inc. (NASDAQ:PLNR) is the most popular stock in this table. On the other hand, JMP Group Inc. (NYSE:JMP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Lantheus Holdings Inc (NASDAQ:LNTH) is even less popular than JMP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.