In this article you are going to find out whether hedge funds think BioCardia, Inc. (NASDAQ:BCDA) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is BCDA a good stock to buy? Money managers were becoming more confident. The number of long hedge fund positions improved by 2 recently. BioCardia, Inc. (NASDAQ:BCDA) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 2. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BCDA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to check out the recent hedge fund action regarding BioCardia, Inc. (NASDAQ:BCDA).
Do Hedge Funds Think BCDA Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BCDA over the last 23 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jim Roumell’s Roumell Asset Management has the largest position in BioCardia, Inc. (NASDAQ:BCDA), worth close to $5.5 million, amounting to 7.9% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $1.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism comprise Greg Eisner’s Engineers Gate Manager, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Roumell Asset Management allocated the biggest weight to BioCardia, Inc. (NASDAQ:BCDA), around 7.89% of its 13F portfolio. Engineers Gate Manager is also relatively very bullish on the stock, earmarking 0.0047 percent of its 13F equity portfolio to BCDA.
As one would reasonably expect, key hedge funds have been driving this bullishness. Renaissance Technologies, assembled the largest position in BioCardia, Inc. (NASDAQ:BCDA). Renaissance Technologies had $1.3 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $0.1 million position during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BioCardia, Inc. (NASDAQ:BCDA) but similarly valued. We will take a look at Hennessy Advisors, Inc. (NASDAQ:HNNA), Sensus Healthcare, Inc. (NASDAQ:SRTS), AMCON Distributing Co. (NYSE:DIT), Yield10 Bioscience, Inc. (NASDAQ:YTEN), Aerpio Pharmaceuticals, Inc. (NASDAQ:ARPO), Bank of the James Financial Group, Inc. (NASDAQ:BOTJ), and AgeX Therapeutics, Inc. (NYSE:AGE). This group of stocks’ market valuations are similar to BCDA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HNNA | 2 | 1412 | 0 |
| SRTS | 3 | 1332 | 1 |
| DIT | 1 | 1259 | 0 |
| YTEN | 7 | 7187 | 5 |
| ARPO | 10 | 19438 | 2 |
| BOTJ | 2 | 6131 | 1 |
| AGE | 3 | 5420 | 0 |
| Average | 4 | 6026 | 1.3 |
View table here if you experience formatting issues.
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 $6 million. That figure was $7 million in BCDA’s case. Aerpio Pharmaceuticals, Inc. (NASDAQ:ARPO) is the most popular stock in this table. On the other hand AMCON Distributing Co. (NYSE:DIT) is the least popular one with only 1 bullish hedge fund positions. BioCardia, Inc. (NASDAQ:BCDA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BCDA is 53.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately BCDA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BCDA investors were disappointed as the stock returned -0.5% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Disclosure: None. This article was originally published at Insider Monkey.