MaxLinear, Inc. (NYSE:MXL) and Athersys, Inc. (NASDAQ:ATHX) are two of the day’s hottest stocks, and they are also two stocks that couldn’t have had more contrasting hedge fund sentiment in the second quarter. Let’s dig into the gains these two stocks have made today and gauge where they might be headed in the future.
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Let’s start with Athersys, Inc. (NASDAQ:ATHX), which appears to be making monster gains today primarily due to an article published on TheStreet.com before the markets opened this morning, touting the stock as one of five priced at less than $10 that could be poised for a breakout based on trading activity in the stock. As the article points out, the biopharmaceutical company, which is developing treatments that can extend or enhance the quality of one’s life, has wilted under intense selling pressure since mid-April, having fallen by over 59% from April 13 until yesterday’s close. However, the stock pushed above its 20-day and 50-day moving averages yesterday towards a region where it may be poised for a larger breakout.
Hedge funds tracked by Insider Monkey were among the market participants putting selling pressure on the stock in the second quarter, as all four firms which had a long position in the stock on March 31 had sold out of it by June 30. While the majority of those positions were small, First Eagle Investment Management did close a position of over 807,000 shares valued at more than $2.3 million as of March 31. Despite the stock having quickly crumbled in April and presenting a potentially intriguing entry point, not a single fund we track took up a long position in the stock by June 30. Shares of Athersys, Inc. (NASDAQ:ATHX) are up by over 12% today and over 16% in the third quarter.
In the case of MaxLinear, Inc. (NYSE:MXL), hedge funds were all over the stock in the second quarter, and are now being rewarded with big gains. Like Athersys, MaxLinear started making its own break to the high side yesterday, gaining over 16% after it announced that it had raised its revenue guidance for the third quarter to $95 million, from a previous range of $90 million-to-$94 million. The provider of integrated and radio frequency circuits also provided updated guidance for its operating expenses that came in slightly below previous guidance.
MaxLinear, Inc. (NYSE:MXL)’s momentum from yesterday has continued into today, with shares up by another 7%, additionally fueled by an upgrade from Needham & Company on the stock to ‘Buy’ from ‘Hold’ this morning, along with a $16 price target, suggesting further upside potential of nearly 25%. Analyst N. Quinn Bolton commented that while the firm was not raising its 2016 earnings estimates for MaxLinear, that they nonetheless reflect conservative assumptions which leave room to the upside.
Investing icon George Soros was among those raising their stakes in MaxLinear during the second quarter. Soros held 2.60 million shares as of June 30, up by 240% during the quarter. Likewise, William C. Martin’s Raging Capital amassed a 2.33 million-share stake in the second quarter, up by 2,013%. Overall, 23 investors we track held long positions in MaxLinear on June 30, up from 16 on March 31, while the value of their positions surged to over $157 million from just under $31 million, giving them a 33.9% stake in the company.
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