In this article, we shall be going over how hedge funds were right about these 5 small-cap stocks. To read our detailed analysis of well-performing industries in 2022, go directly and see Hedge Funds Were Right About These 10 Small-Cap Stocks.
5. Cutera Inc. (NASDAQ:CUTR)
Market Cap (As of August 17): $1.00B
Number of Hedge Fund Holdings: 23
YTD Gains (As of August 17): 28.61%
Headquartered in Brisbane, California, Cutera Inc. (NASDAQ:CUTR) is an American medical device company which manufactures aesthetic laser systems. Investor interest in the stock has dipped slightly in the first quarter of 2022, with 23 hedge funds long the stock, compared to 24 hedge funds in the preceding quarter. As of Q2 2022, Israel Englander’s Millennium Management is the leading shareholder in the company. Other prominent hedge funds to increase their stakes in Cutera Inc. (NASDAQ:CUTR) in Q2 2022 are Pura Vida Investments and Point72 Asset Management.
In June 2022, Cutera Inc. (NASDAQ:CUTR) received FDA clearance for AviClear, the first and only laser-based acne treatment, representing a significant market opportunity for the medical device company. According to experts, Cutera’s (NASDAQ:CUTR) spending on AviClear represents a viable alternative to prescription-strength Isotretinoin “retinoids” class of chemicals, making for a good long-term investment.
In Q2 2022, Cutera Inc. (NASDAQ:CUTR) posted an EPS of -$0.24, trailing behind estimates of -$0.15 by $0.09. According to analysts, the company has projected growth estimates of 25% per year for the next five years. On August 5, Piper Sandler analyst Matt O’Brien lowered the price target on Cutera Inc. (NASDAQ:CUTR) to $55 from $65, maintaining at Outperform rating on the stock. According to the analyst, the company’s Q2 revenues beat consensus but fell short of the bottom-line due to heightened spending. However, O’Brien notes that with AviClear FDA clearance, and the traditional business continuing to perform well, Cutera Inc. (NASDAQ:CUTR) has emerged as a hedge fund favorite in 2022.
4. Chinook Therapeutics Inc. (NASDAQ:KDNY)
Market Cap (As of August 17): $1.37B
Number of Hedge Fund Holdings: 24
YTD Gains (As of August 17): 30.92%
Headquartered in Seattle, Washington, Chinook Therapeutics Inc. (NASDAQ:KDNY) is an American, clinical-stage, biotechnology company which specializes in the development of precision medications for diseases affecting the kidney. Investor interest in Chinook Therapeutics Inc. (NASDAQ:KDNY) has taken a slight dip in the first quarter of 2022, with 24 hedge funds having a stake value of $394.1 million, compared to 25 funds having a collective stake of $424.7 million in the preceding quarter. Overall, market sentiment around Chinook Therapeutics Inc. (NASDAQ:KDNY) has been high, with the company receiving a Bullish rating on Investors Observer‘s Stock Sentiment Indicator.
Chinook Therapeutics’ (NASDAQ:KDNY) share price hit a 52-week high on August 16 as HC Wainwright raised the price target on the stock to $32 from $28, maintaining a Buy rating on the stock. Chinook Therapeutics traded as high as $21.37 and last traded at $21.21, with a volume of 520 shares, as of August 16. Of the 9 Wall Street analysts who reviewed Chinook Therapeutics Inc. (NASDAQ:KDNY) since May, 8 have conferred a Strong Buy rating on the stock. According to analysts, Chinook’s (NASDAQ:KDNY) lead programs Atrasentan and BION-1301 represent compelling assets. Furthermore, Stifel analyst Alex Thompson, who initiated coverage of Chinook Therapeutics Inc. (NASDAQ:KDNY) on July 27 with a Buy rating and a $30 price target, wrote in a research note that the company is well capitalized to comfortably get through catalysts in 2023.
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.
2. Radius Health Inc. (NASDAQ:RDUS)
Market Cap (As of August 17): $479.8M
Number of Hedge Fund Holdings: 28
YTD Gains (As of August 17): 45.45%
Headquartered in Boston, Massachusetts, Radius Health Inc. (NASDAQ:RDUS) is an American biopharmaceutical company which specializes in the development and production of a new generation of drug therapies for osteoporosis and women’s health. Hedge funds have been stacking up on shares of Radius Health Inc. (NASDAQ:RDUS), the latest example being Rubric Capital Management. The hedge fund bought 1.68 million shares worth $16.95 million on August 12, now owning more than 10% of the company. This hefty purchase came right after the company’s out-licensed drug Elacestrant, which is aimed at patients with ER+/HER2- advanced or metastatic breast cancer, received priority review status by the FDA.
On August 15, Gurnet Point Capital and Patient Square Capital announced the completion of their acquisition of Radius Health (NASDAQ:RDUS). In the course of the transaction, shareholders were paid a consideration of $10.00 per share in cash, plus one non-transferable contingent value right per share. As per the terms and conditions of the merger agreement, the purchaser entity for Gurnet Point and Patient Square merged with Radius (NASDAQ:RDUS), and as a result, Radius (NASDAQ:RDUS) has become a subsidiary of Gurnet Point and Patient Square. Radius (NASDAQ:RDUS) will soon be delisted from the NASDAQ Global Market.
1. Tricida Inc. (NASDAQ:TCDA)
Market Cap (As of August 17): $740.4M
Number of Hedge Fund Holdings: 30
YTD Gains (As of August 17): 50.45%
Based in Southern San Francisco, California, Tricida Inc. (NASDAQ:TCDA) is an American pharmaceutical company which specializes in the development and commercialization of an investigational drug candidate called Veverimer, which is designed to treat metabolic acidosis in patients with chronic kidney disease. In Q2 2022, Tricida Inc. (NASDAQ:TCDA) posted an EPS of negative $0.49, beating estimates of negative $0.58 by $0.09.
The company has gained over 50% year-to-date, as of August 17, and as of Q1 2022, investor interest in Tricida Inc. (NASDAQ:TCDA) was at an all-time-high, with the 30 hedge funds long the stock. Some of the most prominent hedge funds to invest in Tricida Inc. (NASDAQ:TCDA) in Q1 2022 include Point72 Asset Management and Deep Track Capital. Samuel Isaly’s OrbiMed Advisors is the largest stakeholder in the company, having a total stake worth over $84.5 million.
On April 12, Goldman Sachs analyst Madhu Kumar initiated coverage of Tricida Inc. (NASDAQ:TCDA) with a Buy rating and a $25 price target. In a research note, the analyst noted that she is optimistic with respect to the outlook for the company’s development of Veverimer, considering the safety and efficacy in three previous placebo-controlled studies which were conducted ahead of the results of a phase 3 study. The data, according to Kumar, seems very promising, and the upcoming results from the studies should be a “key event” for the shares. Moreover, four Wall Street analysts have conferred Tricida Inc. (NASDAQ:TCDA) with a consensus Buy rating since May 2022.
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