The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Cellular Biomedicine Group, Inc. (NASDAQ:CBMG).
Is Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) undervalued? The smart money is in an optimistic mood. The number of long hedge fund bets advanced by 1 in recent months. Our calculations also showed that CBMG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). CBMG was in 3 hedge funds’ portfolios at the end of the first quarter of 2020. There were 2 hedge funds in our database with CBMG holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
Kerr Neilson of Platinum Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a gander at the new hedge fund action regarding Cellular Biomedicine Group, Inc. (NASDAQ:CBMG).
How are hedge funds trading Cellular Biomedicine Group, Inc. (NASDAQ:CBMG)?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the fourth quarter of 2019. On the other hand, there were a total of 2 hedge funds with a bullish position in CBMG a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) was held by Platinum Asset Management, which reported holding $8.7 million worth of stock at the end of September. It was followed by Hillhouse Capital Management with a $3.7 million position. The only other hedge fund that is bullish on the company was GLG Partners.
Now, key hedge funds have been driving this bullishness. GLG Partners, managed by Noam Gottesman, established the biggest position in Cellular Biomedicine Group, Inc. (NASDAQ:CBMG). GLG Partners had $2.2 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) but similarly valued. We will take a look at The Rubicon Project Inc (NYSE:RUBI), The Chefs Warehouse, Inc (NASDAQ:CHEF), Purple Innovation, Inc. (NASDAQ:PRPL), and Tivity Health, Inc. (NASDAQ:TVTY). This group of stocks’ market valuations resemble CBMG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUBI | 22 | 49986 | -2 |
| CHEF | 11 | 35478 | 4 |
| PRPL | 14 | 71224 | 1 |
| TVTY | 13 | 134787 | -5 |
| Average | 15 | 72869 | -0.5 |
View table here if you experience formatting issues.
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 $73 million. That figure was $15 million in CBMG’s case. The Rubicon Project Inc (NYSE:RUBI) is the most popular stock in this table. On the other hand The Chefs Warehouse, Inc (NASDAQ:CHEF) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) is even less popular than CHEF. Hedge funds dodged a bullet by taking a bearish stance towards CBMG. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately CBMG wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); CBMG investors were disappointed as the stock returned -6.2% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
