How Agile Therapeutics Inc (AGRX) Stacks Up Against Its Peers

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.

Is Agile Therapeutics Inc (NASDAQ:AGRX) going to take off soon? The best stock pickers are indeed in a bullish mood. The number of bullish hedge fund positions grew by 1 recently. AGRX was in 9 hedge funds’ portfolios at the end of September. There were 8 hedge funds in our database with AGRX holdings at the end of the previous quarter. At the end of this article we will also compare AGRX to other stocks including Hornbeck Offshore Services, Inc. (NYSE:HOS), Dimension Therapeutics Inc (NASDAQ:DMTX), and Paragon Commercial Corp (NASDAQ:PBNC) to get a better sense of its popularity.

We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

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With all of this in mind, we’re going to take a glance at the latest action surrounding Agile Therapeutics Inc (NASDAQ:AGRX).

Hedge fund activity in Agile Therapeutics Inc (NASDAQ:AGRX)

Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in AGRX at the beginning of this year. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Aisling Capital, led by Dennis Purcell, holds the number one position in Agile Therapeutics Inc (NASDAQ:AGRX). Aisling Capital has a $15.9 million position in the stock, comprising 3.3% of its 13F portfolio. On Aisling Capital’s heels is Adage Capital Management, led by Phill Gross and Robert Atchinson, which holds a $11.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions comprise Joseph Edelman’s Perceptive Advisors, Bihua Chen’s Cormorant Asset Management and Chuck Royce’s Royce & Associates. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, specific money managers were leading the bulls’ herd. Pura Vida Investments, led by Efrem Kamen, established the largest position in Agile Therapeutics Inc (NASDAQ:AGRX). Pura Vida Investments had $0.2 million invested in the company at the end of the quarter. James Dondero’s Highland Capital Management also initiated a $0.2 million position during the quarter. The only other fund with a brand new AGRX position is Renaissance Technologies, one of the largest hedge funds in the world.

Let’s check out hedge fund activity in other stocks similar to Agile Therapeutics Inc (NASDAQ:AGRX). These stocks are Hornbeck Offshore Services, Inc. (NYSE:HOS), Dimension Therapeutics Inc (NASDAQ:DMTX), Paragon Commercial Corp (NASDAQ:PBNC), and Quantum Corp (NYSE:QTM). All of these stocks’ market caps are closest to AGRX’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $43 million in AGRX’s case. Quantum Corp (NYSE:QTM) is the most popular stock in this table. On the other hand Paragon Commercial Corp (NASDAQ:PBNC) is the least popular one with only 4 bullish hedge fund positions. Agile Therapeutics Inc (NASDAQ:AGRX) 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 QTM might be a better candidate to consider taking a long position in.