Hedge Funds Were Right About These 5 Small-Cap Stocks

3. BELLUS Health Inc. (NASDAQ:BLU)

Market Cap (As of August 17): $1.47B

Number of Hedge Fund Holdings: 24

YTD Gains (As of August 17): 44.81%

BELLUS Health Inc. (NASDAQ:BLU) is a Canadian clinical-stage biotechnology company which focuses on the development of a P2X3 antagonist to address refractory chronic cough and other hypersensitization diseases. As of Q2 2022, the company posted an EPS of -$0.18, trailing behind estimates of -$0.16 by $0.02. BELLUS Health Inc. (NASDAQ:BLU) has a market capitalization of $1.47 billion and has gained 44.81% year-to-date, as of August 17. Moreover, the company posted a revenue of $0.04 million (flat Y/Y) in Q2 2022, beating consensus by $0.04 million.

As of Q1 2022, 24 hedge funds hold a total stake of $367.9 million in the stock, a slight decrease from the preceding quarter, where 27 hedge funds held stakes in the company, an all-time-high for BELLUS Health Inc. (NASDAQ:BLU). Prominent hedge funds which have increased their hold on the stock in Q2 2022 include RA Capital Management and Citadel Investment Group, the former being the largest shareholder in the stock. Street analysts are unanimously optimistic about BELLUS Health’s (NASDAQ:BLU) prospects, conferring two Buy and six Outperform ratings.

On August 18, H.C Wainwright analyst Andrew Fein raised the price target on BELLUS Health Inc. (NASDAQ:BLU) to $20 from $16, maintaining a Buy rating on the stock. The analyst expressed optimism after the Phase 3 CALM-1 and CALM-2 studies got FDA and EMA approval. He is convinced that approval for the BLU-5937 will soon follow, centering his conviction on the company’s mechanism of action as well as on its smart trial design. Fein added that the combination of a successful ‘End-of-Phase 2’ meeting with the FDA, and scientific advice from the EMA, reinforces his belief.