The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 730 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 28th, 2019. What do these smart investors think about ANI Pharmaceuticals Inc (NASDAQ:ANIP)?
Is ANI Pharmaceuticals Inc (NASDAQ:ANIP) a superb stock to buy now? Investors who are in the know are becoming less confident. The number of long hedge fund positions went down by 5 lately. Our calculations also showed that ANIP isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s view the fresh hedge fund action regarding ANI Pharmaceuticals Inc (NASDAQ:ANIP).
What does smart money think about ANI Pharmaceuticals Inc (NASDAQ:ANIP)?
At Q2’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ANIP over the last 16 quarters. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Mangrove Partners was the largest shareholder of ANI Pharmaceuticals Inc (NASDAQ:ANIP), with a stake worth $45.2 million reported as of the end of March. Trailing Mangrove Partners was Renaissance Technologies, which amassed a stake valued at $23.7 million. Consonance Capital Management, Hawk Ridge Management, and Weiss Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that ANI Pharmaceuticals Inc (NASDAQ:ANIP) has experienced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedgies who sold off their entire stakes in the second quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth close to $0.8 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dumped about $0.5 million worth. These transactions are important to note, as total hedge fund interest was cut by 5 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as ANI Pharmaceuticals Inc (NASDAQ:ANIP) but similarly valued. We will take a look at Addus Homecare Corporation (NASDAQ:ADUS), NextPoint Residential Trust Inc (NYSE:NXRT), Schweitzer-Mauduit International, Inc. (NYSE:SWM), and Milacron Holdings Corp (NYSE:MCRN). All of these stocks’ market caps are closest to ANIP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADUS | 17 | 103020 | 3 |
| NXRT | 10 | 182442 | 0 |
| SWM | 10 | 24291 | 0 |
| MCRN | 13 | 60802 | -11 |
| Average | 12.5 | 92639 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $99 million in ANIP’s case. Addus Homecare Corporation (NASDAQ:ADUS) is the most popular stock in this table. On the other hand NextPoint Residential Trust Inc (NYSE:NXRT) is the least popular one with only 10 bullish hedge fund positions. ANI Pharmaceuticals Inc (NASDAQ:ANIP) 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately ANIP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ANIP investors were disappointed as the stock returned -11.3% during the third 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 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
