It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in MEI Pharma Inc (NASDAQ:MEIP).
Is MEI Pharma Inc (NASDAQ:MEIP) ready to rally soon? Hedge funds are certainly betting on the stock. The number of bullish hedge fund investments experienced an increase of 3 recently. At the end of this article we will also compare MEIP to other stocks including AMREP Corporation (NYSE:AXR), Turtle Beach Corp (NASDAQ:HEAR), and Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) to get a better sense of its popularity.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Hedge fund activity in MEI Pharma Inc (NASDAQ:MEIP)
At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 100% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the biggest position in MEI Pharma Inc (NASDAQ:MEIP), worth close to $2.1 million. Coming in second is Iguana Healthcare Management, led by Stuart Weisbrod, which holds a $0.5 million position. Other hedge funds and institutional investors with similar optimism comprise Millennium Management, one of the 10 largest hedge funds in the world, Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, and Ken Griffin’s Citadel Investment Group. We should note that GRT Capital Partners is among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.
Consequently, some big names have been driving this bullishness. Iguana Healthcare Management created the most valuable position in MEI Pharma Inc (NASDAQ:MEIP). Israel Englander’s Millennium Management also made a small investment in the stock during the quarter. The following funds were also among the new MEIP investors: GRT Capital Partners and Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks similar to MEI Pharma Inc (NASDAQ:MEIP). These stocks are AMREP Corporation (NYSE:AXR), Turtle Beach Corp (NASDAQ:HEAR), Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS), and Calithera Biosciences Inc (NASDAQ:CALA). This group of stocks’ market valuations are similar to MEIP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AXR | 4 | 4799 | 4 |
| HEAR | 4 | 1342 | 4 |
| SNSS | 7 | 18076 | -4 |
| CALA | 6 | 12162 | -2 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $3 million in MEIP’s case. Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) is the most popular stock in this table. On the other hand AMREP Corporation (NYSE:AXR) is the least popular one with only 4 bullish hedge fund positions. MEI Pharma Inc (NASDAQ:MEIP) 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. In this regard SNSS might be a better candidate to consider taking a long position in.
Disclosure: None
