Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards vTv Therapeutics Inc (NASDAQ:VTVT).
Is vTv Therapeutics Inc (NASDAQ:VTVT) the right pick for your portfolio? Investors who are in the know are becoming hopeful. The number of long hedge fund bets stayed at 6 at the end of September. Considering that the stock started trading in the last quarter only, it might be difficult to understand the hedge fund sentiment. In terms of stock performance, vTv Therapeutics Inc (NASDAQ:VTVT) dropped 40.13% throughout the third quarter.
For a better understanding of investors’ outlook, we will compare vTv Therapeutics Inc (NASDAQ:VTVT) to other stocks, including CAI International Inc (NYSE:CAI), New Home Company Inc (NYSE:NWHM), and Trupanion Inc (NYSE:TRUP) to get a better sense of its popularity.
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Today, there are numerous methods market participants have at their disposal to appraise publicly traded companies. Two of the most useful methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite money managers can outclass the S&P 500 by a healthy amount (see the details here).
With all of this in mind, let’s view the latest action regarding vTv Therapeutics Inc (NASDAQ:VTVT).
What have hedge funds been doing with vTv Therapeutics Inc (NASDAQ:VTVT)?
Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Farallon Capital has the biggest position in vTv Therapeutics Inc (NASDAQ:VTVT), worth close to $1.6 million, comprising less than 0.1% of its total 13F portfolio. Coming in second is Sabby Capital, led by Hal Mintz, holding a $1 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish comprise Anand Parekh’s Alyeska Investment Group, Nathan Fischel’s DAFNA Capital Management, and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Hedge funds with brand new vTv Therapeutics Inc (NASDAQ:VTVT) positions are Alyeska Investment Group, DAFNA Capital Management, and Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as vTv Therapeutics Inc (NASDAQ:VTVT) but similarly valued. We will take a look at CAI International Inc (NYSE:CAI), New Home Company Inc (NYSE:NWHM), Trupanion Inc (NYSE:TRUP), and Gladstone Investment Corporation (NASDAQ:GAIN). All of these stocks’ market caps are similar to vTv Therapeutics Inc (NASDAQ:VTVT)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAI | 11 | 6525 | 11 |
| NWHM | 4 | 44222 | -1 |
| TRUP | 5 | 16570 | -3 |
| GAIN | 7 | 2648 | 1 |
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 $17 million. That figure was $5 million in vTv Therapeutics Inc (NASDAQ:VTVT)’s case. CAI International Inc (NYSE:CAI) is the most popular stock in this table. On the other hand, New Home Company Inc (NYSE:NWHM) is the least popular one with only 4 bullish hedge fund positions. vTv Therapeutics Inc (NASDAQ:VTVT) 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. In this regard, CAI International Inc (NYSE:CAI) might be a better candidate to consider a long position.