The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Novus Therapeutics, Inc. (NASDAQ:NVUS).
Novus Therapeutics, Inc. (NASDAQ:NVUS) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of September. At the end of this article we will also compare NVUS to other stocks including Genius Brands International, Inc. (NASDAQ:GNUS), Can-Fite Biopharma Ltd (NYSEAMERICAN:CANF), and Cyclacel Pharmaceuticals Inc (NASDAQ:CYCC) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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.
Samuel Isaly of OrbiMed Advisors
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to review the recent hedge fund action regarding Novus Therapeutics, Inc. (NASDAQ:NVUS).
What have hedge funds been doing with Novus Therapeutics, Inc. (NASDAQ:NVUS)?
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NVUS over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Samuel Isaly’s OrbiMed Advisors has the largest position in Novus Therapeutics, Inc. (NASDAQ:NVUS), worth close to $2 million, amounting to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Mark Lampert of Biotechnology Value Fund, with a $0.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Ari Zweiman’s 683 Capital Partners, Renaissance Technologies and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Biotechnology Value Fund allocated the biggest weight to Novus Therapeutics, Inc. (NASDAQ:NVUS), around 0.05% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to NVUS.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks similar to Novus Therapeutics, Inc. (NASDAQ:NVUS). These stocks are Genius Brands International, Inc. (NASDAQ:GNUS), Can-Fite Biopharma Ltd (NYSEAMERICAN:CANF), Cyclacel Pharmaceuticals Inc (NASDAQ:CYCC), and Phio Pharmaceuticals Corp. (NASDAQ:PHIO). This group of stocks’ market caps are closest to NVUS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GNUS | 1 | 11 | 0 |
| CANF | 1 | 48 | 0 |
| CYCC | 1 | 464 | 0 |
| PHIO | 1 | 13 | -1 |
| Average | 1 | 134 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1 hedge funds with bullish positions and the average amount invested in these stocks was $0 million. That figure was $3 million in NVUS’s case. Genius Brands International, Inc. (NASDAQ:GNUS) is the most popular stock in this table. On the other hand Genius Brands International, Inc. (NASDAQ:GNUS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Novus Therapeutics, Inc. (NASDAQ:NVUS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on NVUS, though not to the same extent, as the stock returned 6.9% during the fourth quarter (through the end of November) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
