Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI).
Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) has seen a decrease in hedge fund sentiment lately. Our calculations also showed that SPPI 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.
In today’s marketplace there are plenty of tools stock traders can use to grade their stock investments. A pair of the most innovative tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can beat their index-focused peers by a healthy margin (see the details here).
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 gander at the fresh hedge fund action regarding Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI).
How have hedgies been trading Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)?
Heading into the third quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -31% from the first quarter of 2019. On the other hand, there were a total of 18 hedge funds with a bullish position in SPPI a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) was held by Renaissance Technologies, which reported holding $23.5 million worth of stock at the end of March. It was followed by Citadel Investment Group with a $7.1 million position. Other investors bullish on the company included Sio Capital, Marshall Wace LLP, and Fisher Asset Management.
Due to the fact that Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few hedge funds that slashed their full holdings by the end of the second quarter. Interestingly, Steven Boyd’s Armistice Capital dumped the largest position of all the hedgies monitored by Insider Monkey, totaling close to $20.6 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $11 million worth. These transactions are interesting, as total hedge fund interest fell by 4 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks similar to Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI). These stocks are AMC Entertainment Holdings Inc (NYSE:AMC), RPT Realty (NYSE:RPT), Alder Biopharmaceuticals Inc (NASDAQ:ALDR), and Stewart Information Services Corp (NYSE:STC). This group of stocks’ market values match SPPI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMC | 16 | 83024 | -2 |
| RPT | 9 | 14466 | 1 |
| ALDR | 15 | 296719 | 0 |
| STC | 13 | 120760 | -4 |
| Average | 13.25 | 128742 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $129 million. That figure was $43 million in SPPI’s case. AMC Entertainment Holdings Inc (NYSE:AMC) is the most popular stock in this table. On the other hand RPT Realty (NYSE:RPT) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) is even less popular than RPT. Hedge funds dodged a bullet by taking a bearish stance towards SPPI. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SPPI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SPPI investors were disappointed as the stock returned -3.6% 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 in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
