Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is BCLI a good stock to buy? Investors who are in the know were selling. The number of bullish hedge fund positions shrunk by 2 in recent months. Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 7. Our calculations also showed that BCLI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 7 hedge funds in our database with BCLI positions at the end of the fourth quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
David Siegel of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $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. Keeping this in mind we’re going to take a gander at the fresh hedge fund action surrounding Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI).
Do Hedge Funds Think BCLI Is A Good Stock To Buy Now?
At first quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in BCLI a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Neil Shahrestani’s Ikarian Capital has the largest position in Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI), worth close to $1.1 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $0.8 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish contain Hal Mintz’s Sabby Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI), around 0.1% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, designating 0.04 percent of its 13F equity portfolio to BCLI.
Due to the fact that Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI) has experienced bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of funds who sold off their entire stakes by the end of the first quarter. Interestingly, Israel Englander’s Millennium Management sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $0.2 million in stock, and Renaissance Technologies was right behind this move, as the fund dumped about $0.1 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds by the end of the first quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI) but similarly valued. These stocks are Auburn National Bancorporation, Inc. (NASDAQ:AUBN), Franklin Financial Services Corporation (NASDAQ:FRAF), KLX Energy Services Holdings, Inc. (NASDAQ:KLXE), Citizens Community Bancorp Inc. (NASDAQ:CZWI), GasLog Partners LP (NYSE:GLOP), SB Financial Group, Inc. (NASDAQ:SBFG), and Envela Corporation (NYSE:ELA). All of these stocks’ market caps are similar to BCLI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AUBN | 1 | 585 | 0 |
| FRAF | 2 | 1474 | 2 |
| KLXE | 5 | 2474 | -1 |
| CZWI | 4 | 15388 | -1 |
| GLOP | 8 | 8765 | 3 |
| SBFG | 3 | 10143 | 1 |
| ELA | 4 | 2087 | 2 |
| Average | 3.9 | 5845 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.9 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $2 million in BCLI’s case. GasLog Partners LP (NYSE:GLOP) is the most popular stock in this table. On the other hand Auburn National Bancorporation, Inc. (NASDAQ:AUBN) is the least popular one with only 1 bullish hedge fund positions. Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BCLI is 53. 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 positive signal but 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately BCLI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BCLI were disappointed as the stock returned 1.8% since the end of March (through 6/18) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
