Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of BiomX Inc. (NYSE:PHGE).
Hedge fund interest in BiomX Inc. (NYSE:PHGE) shares was flat at the end of last quarter. This is usually a negative indicator. 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 RedHill Biopharma Ltd (NASDAQ:RDHL), Summit Therapeutics PLC (NASDAQ:SMMT), and Exterran Corporation (NYSE:EXTN) to gather more data points. Our calculations also showed that PHGE 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are plenty of formulas stock traders use to analyze stocks. Some of the most innovative formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outpace the market by a significant margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a look at the fresh hedge fund action regarding BiomX Inc. (NYSE:PHGE).
What have hedge funds been doing with BiomX Inc. (NYSE:PHGE)?
At Q1’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2019. On the other hand, there were a total of 1 hedge funds with a bullish position in PHGE a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in BiomX Inc. (NYSE:PHGE) was held by OrbiMed Advisors, which reported holding $16.2 million worth of stock at the end of September. It was followed by Millennium Management with a $1.1 million position. Other investors bullish on the company included Nantahala Capital Management, Weiss Asset Management, and ExodusPoint Capital. In terms of the portfolio weights assigned to each position OrbiMed Advisors allocated the biggest weight to BiomX Inc. (NYSE:PHGE), around 0.27% of its 13F portfolio. Weiss Asset Management is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to PHGE.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Centiva Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let’s now review hedge fund activity in other stocks similar to BiomX Inc. (NYSE:PHGE). We will take a look at RedHill Biopharma Ltd (NASDAQ:RDHL), Summit Therapeutics PLC (NASDAQ:SMMT), Exterran Corporation (NYSE:EXTN), and LCNB Corp. (NASDAQ:LCNB). This group of stocks’ market valuations match PHGE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RDHL | 2 | 652 | -1 |
| SMMT | 3 | 18718 | 0 |
| EXTN | 14 | 13849 | -6 |
| LCNB | 3 | 3087 | 1 |
| Average | 5.5 | 9077 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $18 million in PHGE’s case. Exterran Corporation (NYSE:EXTN) is the most popular stock in this table. On the other hand RedHill Biopharma Ltd (NASDAQ:RDHL) is the least popular one with only 2 bullish hedge fund positions. BiomX Inc. (NYSE:PHGE) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but beat the market by 14.8 percentage points. Unfortunately PHGE wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on PHGE were disappointed as the stock returned -16.9% during the same time period 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.