We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Genprex, Inc. (NASDAQ:GNPX).
Is GNPX a good stock to buy? Hedge funds were taking an optimistic view. The number of long hedge fund positions improved by 4 lately. Genprex, Inc. (NASDAQ:GNPX) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GNPX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 1 hedge funds in our database with GNPX positions at the end of the fourth quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Jim Simons of Renaissance Technologies
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. Now let’s view the latest hedge fund action encompassing Genprex, Inc. (NASDAQ:GNPX).
Do Hedge Funds Think GNPX Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 400% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GNPX over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Genprex, Inc. (NASDAQ:GNPX), with a stake worth $1.3 million reported as of the end of March. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $0.5 million. Citadel Investment Group, Iridian Asset Management, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Pinz Capital allocated the biggest weight to Genprex, Inc. (NASDAQ:GNPX), around 0.04% of its 13F portfolio. Iridian Asset Management is also relatively very bullish on the stock, dishing out 0.0042 percent of its 13F equity portfolio to GNPX.
As one would reasonably expect, key money managers have jumped into Genprex, Inc. (NASDAQ:GNPX) headfirst. Renaissance Technologies, established the biggest position in Genprex, Inc. (NASDAQ:GNPX). Renaissance Technologies had $1.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new GNPX investors: David Cohen and Harold Levy’s Iridian Asset Management and Matthew L Pinz’s Pinz Capital.
Let’s now review hedge fund activity in other stocks similar to Genprex, Inc. (NASDAQ:GNPX). These stocks are Midwest Holding Inc. (NASDAQ:MDWT), MOGU Inc. (NYSE:MOGU), ChoiceOne Financial Services, Inc. (NASDAQ:COFS), AG Mortgage Investment Trust Inc (NYSE:MITT), Marker Therapeutics, Inc. (NASDAQ:MRKR), Satsuma Pharmaceuticals, Inc. (NASDAQ:STSA), and Farmer Brothers Co. (NASDAQ:FARM). This group of stocks’ market values match GNPX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDWT | 7 | 23330 | -2 |
| MOGU | 3 | 21358 | -3 |
| COFS | 1 | 402 | -1 |
| MITT | 12 | 28134 | 1 |
| MRKR | 6 | 1418 | 1 |
| STSA | 14 | 85819 | 4 |
| FARM | 10 | 27532 | -3 |
| Average | 7.6 | 26856 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.6 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $2 million in GNPX’s case. Satsuma Pharmaceuticals, Inc. (NASDAQ:STSA) is the most popular stock in this table. On the other hand ChoiceOne Financial Services, Inc. (NASDAQ:COFS) is the least popular one with only 1 bullish hedge fund positions. Genprex, Inc. (NASDAQ:GNPX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GNPX is 54.4. 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately GNPX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GNPX investors were disappointed as the stock returned -21.3% 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 most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.