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 second 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 5 years and analyze what the smart money thinks of Aptose Biosciences Inc (NASDAQ:APTO) based on that data and determine whether they were really smart about the stock.
Aptose Biosciences Inc (NASDAQ:APTO) has experienced an increase in hedge fund interest recently. Aptose Biosciences Inc (NASDAQ:APTO) was in 18 hedge funds’ portfolios at the end of June. The all time high for this statistics is 19. Our calculations also showed that APTO isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Philip Hempleman of Ardsley Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now let’s analyze the fresh hedge fund action encompassing Aptose Biosciences Inc (NASDAQ:APTO).
How are hedge funds trading Aptose Biosciences Inc (NASDAQ:APTO)?
At second quarter’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in APTO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Mitchell Blutt’s Consonance Capital Management has the most valuable position in Aptose Biosciences Inc (NASDAQ:APTO), worth close to $44 million, amounting to 2.6% of its total 13F portfolio. Sitting at the No. 2 spot is Nantahala Capital Management, led by Wilmot B. Harkey and Daniel Mack, holding a $37.7 million position; 1.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions consist of James A. Silverman’s Opaleye Management, Mark Hart III’s Corriente Advisors and Brian Ashford-Russell and Tim Woolley’s Polar Capital. In terms of the portfolio weights assigned to each position Corriente Advisors allocated the biggest weight to Aptose Biosciences Inc (NASDAQ:APTO), around 11.33% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, earmarking 4.28 percent of its 13F equity portfolio to APTO.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Prosight Capital, managed by Lawrence Hawkins, created the largest position in Aptose Biosciences Inc (NASDAQ:APTO). Prosight Capital had $4.9 million invested in the company at the end of the quarter. Arsani William’s Logos Capital also made a $4.7 million investment in the stock during the quarter. The other funds with brand new APTO positions are Blair Baker’s Precept Capital Management and Philip Hempleman’s Ardsley Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Aptose Biosciences Inc (NASDAQ:APTO) but similarly valued. These stocks are Rubius Therapeutics, Inc. (NASDAQ:RUBY), Thermon Group Holdings, Inc. (NYSE:THR), MarineMax, Inc. (NYSE:HZO), Nexgen Energy Ltd. (NYSE:NXE), Owens & Minor, Inc. (NYSE:OMI), GTT Communications Inc (NYSE:GTT), and SIGA Technologies Inc. (NASDAQ:SIGA). This group of stocks’ market valuations match APTO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUBY | 7 | 2207 | 3 |
| THR | 12 | 27961 | 1 |
| HZO | 21 | 43157 | 11 |
| NXE | 7 | 18290 | 2 |
| OMI | 15 | 69007 | -1 |
| GTT | 9 | 136407 | -1 |
| SIGA | 11 | 44401 | 1 |
| Average | 11.7 | 48776 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.7 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $165 million in APTO’s case. MarineMax, Inc. (NYSE:HZO) is the most popular stock in this table. On the other hand Rubius Therapeutics, Inc. (NASDAQ:RUBY) is the least popular one with only 7 bullish hedge fund positions. Aptose Biosciences Inc (NASDAQ:APTO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for APTO is 75.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately APTO wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on APTO were disappointed as the stock returned -4.9% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
