The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC) based on those filings.
China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC) has seen an increase in hedge fund sentiment of late. Our calculations also showed that SXTC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of indicators investors can use to evaluate stocks. Some of the less utilized indicators are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can trounce the market by a very impressive margin (see the details here).
Sander Gerber of Hudson Bay Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a glance at the new hedge fund action regarding China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC).
What have hedge funds been doing with China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC)?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the fourth quarter of 2019. By comparison, 0 hedge funds held shares or bullish call options in SXTC 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.
More specifically, Hudson Bay Capital Management was the largest shareholder of China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC), with a stake worth $1.2 million reported as of the end of September. Trailing Hudson Bay Capital Management was Renaissance Technologies, which amassed a stake valued at $0.3 million. Citadel Investment Group was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hudson Bay Capital Management allocated the biggest weight to China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC), around 0.03% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0003 percent of its 13F equity portfolio to SXTC.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, created the biggest position in China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC). Citadel Investment Group had $0 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC) but similarly valued. These stocks are Spring Bank Pharmaceuticals, Inc. (NASDAQ:SBPH), Teligent, Inc. (NASDAQ:TLGT), Global Eagle Acquisition Corp (NASDAQ:ENT), and Mitcham Industries, Inc. (NASDAQ:MIND). All of these stocks’ market caps are similar to SXTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBPH | 4 | 1219 | -1 |
| TLGT | 2 | 1088 | -1 |
| ENT | 5 | 4672 | -1 |
| MIND | 3 | 4161 | 0 |
| Average | 3.5 | 2785 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $2 million in SXTC’s case. Global Eagle Acquisition Corp (NASDAQ:ENT) is the most popular stock in this table. On the other hand Teligent, Inc. (NASDAQ:TLGT) is the least popular one with only 2 bullish hedge fund positions. China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC) 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd and surpassed the market by 15.6 percentage points. Unfortunately SXTC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); SXTC investors were disappointed as the stock returned -24.5% during the second 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 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.