Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by 4 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) from the perspective of those elite funds.
Is ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) a safe stock to buy now? Money managers are taking an optimistic view. The number of long hedge fund bets improved by 6 in recent months. Our calculations also showed that ZIOP isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most stock holders, hedge funds are perceived as underperforming, old investment tools of years past. While there are over 8000 funds in operation at the moment, Our experts choose to focus on the upper echelon of this group, approximately 750 funds. These money managers oversee the majority of the smart money’s total capital, and by monitoring their finest picks, Insider Monkey has uncovered a number of investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to check out the new hedge fund action encompassing ZIOPHARM Oncology Inc. (NASDAQ:ZIOP).
How have hedgies been trading ZIOPHARM Oncology Inc. (NASDAQ:ZIOP)?
Heading into the third quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. By comparison, 4 hedge funds held shares or bullish call options in ZIOP a year ago. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, MSDC Management held the most valuable stake in ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), which was worth $64.1 million at the end of the second quarter. On the second spot was Miller Value Partners which amassed $53.9 million worth of shares. Moreover, Discovery Capital Management, Millennium Management, and D E Shaw were also bullish on ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Miller Value Partners, managed by Bill Miller, created the most valuable position in ZIOPHARM Oncology Inc. (NASDAQ:ZIOP). Miller Value Partners had $53.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $2 million investment in the stock during the quarter. The other funds with brand new ZIOP positions are D. E. Shaw’s D E Shaw, Renaissance Technologies, and Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) but similarly valued. We will take a look at Wabash National Corporation (NYSE:WNC), Natus Medical Inc (NASDAQ:BABY), Trueblue Inc (NYSE:TBI), and Forrester Research, Inc. (NASDAQ:FORR). This group of stocks’ market values match ZIOP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WNC | 15 | 63811 | -1 |
| BABY | 22 | 93186 | -2 |
| TBI | 15 | 83342 | -2 |
| FORR | 10 | 61046 | -3 |
| Average | 15.5 | 75346 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $142 million in ZIOP’s case. Natus Medical Inc (NASDAQ:BABY) is the most popular stock in this table. On the other hand Forrester Research, Inc. (NASDAQ:FORR) is the least popular one with only 10 bullish hedge fund positions. ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately ZIOP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ZIOP investors were disappointed as the stock returned -26.6% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
