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 Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) from the perspective of those successful funds.
Is Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) a superb investment today? Hedge funds are definitely reducing their bets on the stock. The number of long hedge fund investments decreased by 3 in recent months. CASC was in 11 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with CASC positions at the end of the previous quarter. At the end of this article we will also compare CASC to other stocks including Farmers Capital Bank Corp (NASDAQ:FFKT), Verso Corporation (NYSE:VRS), and Adaptimmune Therapeutics PLC – ADR (NASDAQ:ADAP) to get a better sense of its popularity.
Follow Cascadian Therapeutics Inc. (NASDAQ:CASC)
Follow Cascadian Therapeutics Inc. (NASDAQ:CASC)
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.
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Keeping this in mind, we’re going to check out the fresh action regarding Cascadian Therapeutics Inc (USA) (NASDAQ:CASC).
What have hedge funds been doing with Cascadian Therapeutics Inc (USA) (NASDAQ:CASC)?
Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -21% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CASC over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Baupost Group, led by Seth Klarman, holds the largest position in Cascadian Therapeutics Inc (USA) (NASDAQ:CASC). Baupost Group has a $41 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Biotechnology Value Fund, led by Mark Lampert, holding a $30.8 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions consist of Behzad Aghazadeh’s venBio Select Advisor, Joseph Edelman’s Perceptive Advisors and Millennium Management, one of the 10 largest hedge funds in the world. 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 that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dropped their entire stakes in the stock during the third quarter. Intriguingly, First Eagle Investment Management dropped the biggest position of the “upper crust” of funds studied by Insider Monkey, valued at close to $0.4 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also cut its stock, about $0.3 million worth.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) but similarly valued. These stocks are Farmers Capital Bank Corp (NASDAQ:FFKT), Verso Corporation (NYSE:VRS), Adaptimmune Therapeutics PLC – ADR (NASDAQ:ADAP), and Daqo New Energy Corp (NYSE:DQ). This group of stocks’ market values resemble CASC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FFKT | 3 | 33480 | 0 |
| VRS | 17 | 67775 | 17 |
| ADAP | 12 | 33285 | -2 |
| DQ | 6 | 27543 | 2 |
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $89 million in CASC’s case. Verso Corporation (NYSE:VRS) is the most popular stock in this table. On the other hand Farmers Capital Bank Corp (NASDAQ:FFKT) is the least popular one with only 3 bullish hedge fund positions. Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) 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 VRS might be a better candidate to consider taking a long position in.
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