Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Antares Pharma Inc (NASDAQ:ATRS).
Antares Pharma Inc (NASDAQ:ATRS) investors should be aware of a decrease in hedge fund interest lately. ATRS was in 12 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with ATRS positions at the end of the previous quarter. At the end of this article we will also compare ATRS to other stocks including Artesian Resources Corporation (NASDAQ:ARTNA), Miller Industries, Inc. (NYSE:MLR), and Geospace Technologies Corp (NASDAQ:GEOS) to get a better sense of its popularity.
Follow Antares Pharma Inc. (NASDAQ:ATRS)
Follow Antares Pharma Inc. (NASDAQ:ATRS)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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How are hedge funds trading Antares Pharma Inc (NASDAQ:ATRS)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 29% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in ATRS at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Broadfin Capital, led by Kevin Kotler, holds the number one position in Antares Pharma Inc (NASDAQ:ATRS). Broadfin Capital has a $25 million position in the stock, comprising 2.2% of its 13F portfolio. Sitting at the No. 2 spot is Armistice Capital, led by Steven Boyd, holding a $20.7 million position; the fund has 6.6% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions include Renaissance Technologies, one of the largest hedge funds in the world, Mark Kingdon’s Kingdon Capital and Anand Parekh’s Alyeska Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Due to the fact that Antares Pharma Inc (NASDAQ:ATRS) has encountered falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of funds that slashed their entire stakes last quarter. Interestingly, Benjamin A. Smith’s Laurion Capital Management cut the largest investment of the 700 funds studied by Insider Monkey, comprising about $0.5 million in stock. Hal Mintz’s fund, Sabby Capital, also dropped its stock, about $0.4 million worth.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Antares Pharma Inc (NASDAQ:ATRS) but similarly valued. We will take a look at Artesian Resources Corporation (NASDAQ:ARTNA), Miller Industries, Inc. (NYSE:MLR), Geospace Technologies Corp (NASDAQ:GEOS), and Sparton Corporation (NYSE:SPA). This group of stocks’ market values match ATRS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARTNA | 4 | 9405 | 0 |
| MLR | 5 | 47245 | -1 |
| GEOS | 4 | 5432 | 0 |
| SPA | 15 | 48666 | 8 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $60 million in ATRS’s case. Sparton Corporation (NYSE:SPA) is the most popular stock in this table. On the other hand Artesian Resources Corporation (NASDAQ:ARTNA) is the least popular one with only 4 bullish hedge fund positions. Antares Pharma Inc (NASDAQ:ATRS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SPA might be a better candidate to consider taking a long position in.
Disclosure: None
