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 first 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 4.5 years and analyze what the smart money thinks of Novus Therapeutics, Inc. (NASDAQ:NVUS) based on that data.
Novus Therapeutics, Inc. (NASDAQ:NVUS) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as TSR, Inc. (NASDAQ:TSRI), Blonder Tongue Labs, Inc. (NYSE:BDR), and Trans World Entertainment Corporation (NASDAQ:TWMC) to gather more data points. Our calculations also showed that NVUS 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Samuel Isaly of OrbiMed Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. 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 the 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 check out the key hedge fund action encompassing Novus Therapeutics, Inc. (NASDAQ:NVUS).
What does smart money think about Novus Therapeutics, Inc. (NASDAQ:NVUS)?
At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in NVUS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, OrbiMed Advisors, managed by Samuel Isaly, holds the largest position in Novus Therapeutics, Inc. (NASDAQ:NVUS). OrbiMed Advisors has a $1.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by 683 Capital Partners, led by Ari Zweiman, holding a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions encompass Mark Lampert’s Biotechnology Value Fund / BVF Inc, Renaissance Technologies and . In terms of the portfolio weights assigned to each position 683 Capital Partners allocated the biggest weight to Novus Therapeutics, Inc. (NASDAQ:NVUS), around 0.04% of its 13F portfolio. Biotechnology Value Fund / BVF Inc is also relatively very bullish on the stock, setting aside 0.02 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 take a look at hedge fund activity in other stocks – not necessarily in the same industry as Novus Therapeutics, Inc. (NASDAQ:NVUS) but similarly valued. These stocks are TSR, Inc. (NASDAQ:TSRI), Blonder Tongue Labs, Inc. (NYSE:BDR), Trans World Entertainment Corporation (NASDAQ:TWMC), and Micron Solutions, Inc. (NYSE:MICR). This group of stocks’ market values resemble NVUS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TSRI | 1 | 238 | 0 |
| BDR | 1 | 44 | 0 |
| TWMC | 1 | 362 | 0 |
| MICR | 1 | 148 | 0 |
| Average | 1 | 198 | 0 |
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 $2 million in NVUS’s case. TSR, Inc. (NASDAQ:TSRI) is the most popular stock in this table. On the other hand TSR, Inc. (NASDAQ:TSRI) 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 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on NVUS as the stock returned 225.6% so far in Q2 (through the end of May) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
