Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of Pluristem Therapeutics Inc. (NASDAQ:PSTI) based on that data.
Is Pluristem Therapeutics Inc. (NASDAQ:PSTI) the right pick for your portfolio? Prominent investors are taking a bullish view. The number of bullish hedge fund positions improved by 1 recently. Our calculations also showed that PSTI isn’t among the 30 most popular stocks among hedge funds.
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 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. 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.
Paul Marshall of Marshall Wace
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to analyze the fresh hedge fund action encompassing Pluristem Therapeutics Inc. (NASDAQ:PSTI).
What does smart money think about Pluristem Therapeutics Inc. (NASDAQ:PSTI)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. By comparison, 3 hedge funds held shares or bullish call options in PSTI a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the most valuable position in Pluristem Therapeutics Inc. (NASDAQ:PSTI). Renaissance Technologies has a $0.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Sabby Capital, led by Hal Mintz, holding a $0.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish encompass Ken Griffin’s Citadel Investment Group, Paul Marshall and Ian Wace’s Marshall Wace and . In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Pluristem Therapeutics Inc. (NASDAQ:PSTI), around 0.07% of its portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0006 percent of its 13F equity portfolio to PSTI.
As aggregate interest increased, key money managers have jumped into Pluristem Therapeutics Inc. (NASDAQ:PSTI) headfirst. Sabby Capital, managed by Hal Mintz, assembled the most outsized position in Pluristem Therapeutics Inc. (NASDAQ:PSTI). Sabby Capital had $0.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0 million position during the quarter. The only other fund with a brand new PSTI position is Paul Marshall and Ian Wace’s Marshall Wace.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Pluristem Therapeutics Inc. (NASDAQ:PSTI) but similarly valued. We will take a look at ALJ Regional Holdings, Inc. (NASDAQ:ALJJ), Luby’s, Inc. (NYSE:LUB), Mereo BioPharma Group plc (NASDAQ:MREO), and Gridsum Holding Inc. (NASDAQ:GSUM). This group of stocks’ market valuations are similar to PSTI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALJJ | 3 | 826 | 1 |
| LUB | 3 | 7318 | -1 |
| MREO | 4 | 2778 | 0 |
| GSUM | 5 | 9525 | 1 |
| Average | 3.75 | 5112 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.75 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $1 million in PSTI’s case. Gridsum Holding Inc. (NASDAQ:GSUM) is the most popular stock in this table. On the other hand ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Pluristem Therapeutics Inc. (NASDAQ:PSTI) is even less popular than ALJJ. Hedge funds dodged a bullet by taking a bearish stance towards PSTI. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately PSTI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); PSTI investors were disappointed as the stock returned -13.1% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
