We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Protagonist Therapeutics, Inc. (NASDAQ:PTGX).
Protagonist Therapeutics, Inc. (NASDAQ:PTGX) investors should be aware of an increase in hedge fund sentiment lately. PTGX was in 15 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with PTGX positions at the end of the previous quarter. Our calculations also showed that PTGX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most traders, hedge funds are seen as unimportant, old financial vehicles of the past. While there are greater than 8000 funds trading at the moment, We look at the upper echelon of this group, about 750 funds. These hedge fund managers administer most of the hedge fund industry’s total capital, and by shadowing their best equity investments, Insider Monkey has found various investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to check out the fresh hedge fund action surrounding Protagonist Therapeutics, Inc. (NASDAQ:PTGX).
How are hedge funds trading Protagonist Therapeutics, Inc. (NASDAQ:PTGX)?
At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PTGX over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Perceptive Advisors was the largest shareholder of Protagonist Therapeutics, Inc. (NASDAQ:PTGX), with a stake worth $24.9 million reported as of the end of September. Trailing Perceptive Advisors was Farallon Capital, which amassed a stake valued at $18 million. Baker Bros. Advisors, Millennium Management, and Biotechnology Value Fund were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Biotechnology Value Fund allocated the biggest weight to Protagonist Therapeutics, Inc. (NASDAQ:PTGX), around 0.86% of its 13F portfolio. Vivo Capital is also relatively very bullish on the stock, setting aside 0.82 percent of its 13F equity portfolio to PTGX.
Consequently, specific money managers have been driving this bullishness. Vivo Capital, managed by Albert Cha and Frank Kung, assembled the largest position in Protagonist Therapeutics, Inc. (NASDAQ:PTGX). Vivo Capital had $7.2 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $2 million position during the quarter. The other funds with brand new PTGX positions are David Harding’s Winton Capital Management and Cliff Asness’s AQR Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Protagonist Therapeutics, Inc. (NASDAQ:PTGX). These stocks are BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), North American Energy Partners Inc.(USA) (NYSE:NOA), and Akazoo S.A. (NASDAQ:SONG). This group of stocks’ market valuations are closest to PTGX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCRX | 16 | 102956 | 2 |
| CRBP | 7 | 30293 | -1 |
| NOA | 10 | 47482 | 1 |
| SONG | 4 | 5292 | -2 |
| Average | 9.25 | 46506 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $106 million in PTGX’s case. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is the most popular stock in this table. On the other hand Akazoo S.A. (NASDAQ:SONG) is the least popular one with only 4 bullish hedge fund positions. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately PTGX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PTGX were disappointed as the stock returned -27.6% during the fourth quarter (through the end of November) 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 this year.
Disclosure: None. This article was originally published at Insider Monkey.
