We can judge whether SIGA Technologies Inc. (NASDAQ:SIGA) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
SIGA Technologies Inc. (NASDAQ:SIGA) was in 10 hedge funds’ portfolios at the end of the second quarter of 2019. SIGA shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. There were 16 hedge funds in our database with SIGA positions at the end of the previous quarter. Our calculations also showed that SIGA 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.
If you’d ask most traders, hedge funds are assumed to be slow, old financial tools of the past. While there are over 8000 funds in operation at present, We hone in on the upper echelon of this club, approximately 750 funds. These money managers preside over most of the smart money’s total capital, and by monitoring their finest investments, Insider Monkey has formulated various investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
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 take a look at the fresh hedge fund action surrounding SIGA Technologies Inc. (NASDAQ:SIGA).
What have hedge funds been doing with SIGA Technologies Inc. (NASDAQ:SIGA)?
Heading into the third quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -38% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in SIGA over the last 16 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Jet Capital Investors held the most valuable stake in SIGA Technologies Inc. (NASDAQ:SIGA), which was worth $15.1 million at the end of the second quarter. On the second spot was Nantahala Capital Management which amassed $10.2 million worth of shares. Moreover, Oaktree Capital Management, Citadel Investment Group, and Renaissance Technologies were also bullish on SIGA Technologies Inc. (NASDAQ:SIGA), allocating a large percentage of their portfolios to this stock.
Judging by the fact that SIGA Technologies Inc. (NASDAQ:SIGA) has faced bearish sentiment from hedge fund managers, it’s easy to see that there were a few money managers that decided to sell off their positions entirely in the second quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the biggest stake of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $0.6 million in stock. Israel Englander’s fund, Millennium Management, also cut its stock, about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds in the second quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SIGA Technologies Inc. (NASDAQ:SIGA) but similarly valued. We will take a look at BBX Capital Corporation (NYSE:BBX), CONSOL Coal Resources LP (NYSE:CCR), Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), and 111, Inc. (NASDAQ:YI). This group of stocks’ market values resemble SIGA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BBX | 15 | 35360 | -1 |
| CCR | 4 | 96102 | -1 |
| CRBP | 8 | 49866 | -1 |
| YI | 3 | 12658 | 0 |
| Average | 7.5 | 48497 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $28 million in SIGA’s case. BBX Capital Corporation (NYSE:BBX) is the most popular stock in this table. On the other hand 111, Inc. (NASDAQ:YI) is the least popular one with only 3 bullish hedge fund positions. SIGA Technologies Inc. (NASDAQ:SIGA) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SIGA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SIGA were disappointed as the stock returned -9.9% 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 this year.
Disclosure: None. This article was originally published at Insider Monkey.
