Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Intec Pharma Ltd (NASDAQ:NTEC)? The smart money sentiment can provide an answer to this question.
Intec Pharma Ltd (NASDAQ:NTEC) investors should be aware of an increase in support from the world’s most elite money managers of late. NTEC was in 10 hedge funds’ portfolios at the end of the first quarter of 2019. There were 9 hedge funds in our database with NTEC holdings at the end of the previous quarter. Our calculations also showed that ntec isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Nathan Fischel of DAFNA Capital
We’re going to view the latest hedge fund action surrounding Intec Pharma Ltd (NASDAQ:NTEC).
What does smart money think about Intec Pharma Ltd (NASDAQ:NTEC)?
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in NTEC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Intec Pharma Ltd (NASDAQ:NTEC) was held by venBio Select Advisor, which reported holding $18.3 million worth of stock at the end of March. It was followed by Adage Capital Management with a $12.5 million position. Other investors bullish on the company included Sectoral Asset Management, Prosight Capital, and DAFNA Capital Management.
Consequently, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most outsized position in Intec Pharma Ltd (NASDAQ:NTEC). Millennium Management had $0.1 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to Intec Pharma Ltd (NASDAQ:NTEC). We will take a look at Celsius Holdings, Inc. (NASDAQ:CELH), Amber Road Inc (NYSE:AMBR), Applied Optoelectronics Inc (NASDAQ:AAOI), and Novavax, Inc. (NASDAQ:NVAX). All of these stocks’ market caps resemble NTEC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CELH | 2 | 150 | 2 |
| AMBR | 11 | 62499 | 2 |
| AAOI | 13 | 20308 | 2 |
| NVAX | 11 | 8979 | -2 |
| Average | 9.25 | 22984 | 1 |
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 $23 million. That figure was $48 million in NTEC’s case. Applied Optoelectronics Inc (NASDAQ:AAOI) is the most popular stock in this table. On the other hand Celsius Holdings, Inc. (NASDAQ:CELH) is the least popular one with only 2 bullish hedge fund positions. Intec Pharma Ltd (NASDAQ:NTEC) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NTEC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NTEC were disappointed as the stock returned -43% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
