We can judge whether ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) has seen a decrease in support from the world’s most elite money managers recently. It may not come as a surprise, as the stock of ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) lost 24.92% value throughout the third quarter. In order to understand the hedge fund sentiment, we will find out more about the hedgies holding stakes in the company, at the end of the previous quarter.
For an in-depth understanding of the hedge fund behavior, we will compare ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) to other stocks, including NBT Bancorp Inc. (NASDAQ:NBTB), THE CHEMOURS COMPANY (NYSE:CC), and Granite Construction Inc. (NYSE:GVA) to get a better sense of its popularity.
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Today, there are a lot of metrics market participants can use to evaluate their stock investments. A duo of the less utilized metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace their index-focused peers by a healthy margin (see the details here).
Keeping this in mind, we’re going to review the fresh action regarding ZIOPHARM Oncology Inc. (NASDAQ:ZIOP).
Hedge fund activity in ZIOPHARM Oncology Inc. (NASDAQ:ZIOP)
At the end of September, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 40% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management has the most valuable position in ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), worth close to $39.7 million, accounting for 1.3% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $3.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism contain Israel Englander’s Millennium Management, Cliff Asness’ AQR Capital Management, and Ken Griffin’s Citadel Investment Group.
Judging by the fact that ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) has faced a falling interest from the smart money, we can see that there was a specific group of hedge funds that elected to cut their entire stakes heading into Q4. At the top of the heap, Dan Loeb’s Third Point dumped the largest stake of the 700 funds monitored by Insider Monkey, totaling close to $23.4 million in stock, and James Dinan’s York Capital Management was right behind this move, as the fund said goodbye to about $5.1 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest was cut by 6 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) but similarly valued. We will take a look at NBT Bancorp Inc. (NASDAQ:NBTB), THE CHEMOURS COMPANY (NYSE:CC), Granite Construction Inc. (NYSE:GVA), and Potlatch Corporation (NASDAQ:PCH). All of these stocks’ market caps are similar to ZIOPHARM Oncology Inc. (NASDAQ:ZIOP)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NBTB | 5 | 11273 | -1 |
| CC | 24 | 171776 | 14 |
| GVA | 17 | 58763 | 3 |
| PCH | 13 | 64274 | 3 |
As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $48 million in ZIOPHARM Oncology Inc. (NASDAQ:ZIOP)’s case. THE CHEMOURS COMPANY (NYSE:CC) is the most popular stock in this table. On the other hand, NBT Bancorp Inc. (NASDAQ:NBTB) is the least popular one with only 5 bullish hedge fund positions. ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, the CHEMOURS COMPANY (NYSE:CC) might be a better candidate to consider a long position.
