The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Trillium Therapeutics Inc. (NASDAQ:TRIL) from the perspective of those successful funds.
Is Trillium Therapeutics Inc. (NASDAQ:TRIL) going to take off soon? The best stock pickers are really taking an optimistic view. The number of bullish hedge fund investments went up by 1 in recent months. In this way, there were 9 hedge funds in our database with TRIL positions at the end of the third quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Demand Media Inc (NYSE:DMD), Skyline Corporation (NYSE:SKY), and Uranium Energy Corp. (NYSEAMEX:UEC) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
crystal51/Shutterstock.com
How are hedge funds trading Trillium Therapeutics Inc. (NASDAQ:TRIL)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a jump of 13% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in TRIL heading into this year. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Julian Baker and Felix Baker’s Baker Bros. Advisors has the number one position in Trillium Therapeutics Inc. (NASDAQ:TRIL), worth close to $6.1 million. On Baker Bros. Advisors’s heels is Steve Cohen of Point72 Asset Management, with a $5.5 million position. Some other members of the smart money that hold long positions include Behzad Aghazadeh’s venBio Select Advisor, James A. Silverman’s Opaleye Management and James E. Flynn’s Deerfield Management. 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.
Consequently, key hedge funds have been driving this bullishness. Polar Capital, led by Brian Ashford-Russell and Tim Woolley, created the most outsized position in Trillium Therapeutics Inc. (NASDAQ:TRIL). Polar Capital had $0.5 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks similar to Trillium Therapeutics Inc. (NASDAQ:TRIL). We will take a look at Demand Media Inc (NYSE:DMD), Skyline Corporation (NYSE:SKY), Uranium Energy Corp. (NYSEAMEX:UEC), and Navios Maritime Partners L.P. (NYSE:NMM). This group of stocks’ market valuations resemble TRIL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DMD | 5 | 20095 | -3 |
| SKY | 4 | 26258 | 0 |
| UEC | 4 | 679 | -2 |
| NMM | 2 | 388 | -1 |
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $22 million in TRIL’s case. Demand Media Inc (NYSE:DMD) is the most popular stock in this table. On the other hand Navios Maritime Partners L.P. (NYSE:NMM) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Trillium Therapeutics Inc. (NASDAQ:TRIL) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
