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 Fortress Biotech Inc (NASDAQ:FBIO) based on that data.
Is Fortress Biotech Inc (NASDAQ:FBIO) a healthy stock for your portfolio? The smart money is taking a bullish view. The number of long hedge fund bets improved by 1 in recent months. Our calculations also showed that FBIO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the fresh hedge fund action surrounding Fortress Biotech Inc (NASDAQ:FBIO).
What have hedge funds been doing with Fortress Biotech Inc (NASDAQ:FBIO)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in FBIO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Fortress Biotech Inc (NASDAQ:FBIO) was held by Opaleye Management, which reported holding $2.3 million worth of stock at the end of September. It was followed by Opus Point Partners Management with a $0.9 million position. Other investors bullish on the company included Millennium Management, Nantahala Capital Management, and 683 Capital Partners. In terms of the portfolio weights assigned to each position Opus Point Partners Management allocated the biggest weight to Fortress Biotech Inc (NASDAQ:FBIO), around 1.56% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, earmarking 0.84 percent of its 13F equity portfolio to FBIO.
Consequently, key hedge funds have jumped into Fortress Biotech Inc (NASDAQ:FBIO) headfirst. Opaleye Management, managed by James A. Silverman, created the biggest position in Fortress Biotech Inc (NASDAQ:FBIO). Opaleye Management had $2.3 million invested in the company at the end of the quarter. Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management also made a $0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Ari Zweiman’s 683 Capital Partners and Paul Marshall and Ian Wace’s Marshall Wace.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Fortress Biotech Inc (NASDAQ:FBIO) but similarly valued. We will take a look at Cortland Bancorp (NASDAQ:CLDB), TransGlobe Energy Corporation (NASDAQ:TGA), Contango Oil & Gas Company (NYSE:MCF), and Fennec Pharmaceuticals Inc. (NASDAQ:FENC). This group of stocks’ market valuations match FBIO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLDB | 3 | 13737 | 0 |
| TGA | 3 | 6551 | -1 |
| MCF | 3 | 1003 | -2 |
| FENC | 6 | 33963 | 0 |
| Average | 3.75 | 13814 | -0.75 |
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 $14 million. That figure was $5 million in FBIO’s case. Fennec Pharmaceuticals Inc. (NASDAQ:FENC) is the most popular stock in this table. On the other hand Cortland Bancorp (NASDAQ:CLDB) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Fortress Biotech Inc (NASDAQ:FBIO) 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 FBIO as the stock returned 46.1% during the first two months of Q4 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
