Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
In this article, we are going to discuss the hedge fund sentiment towards Infinity Pharmaceuticals Inc. (NASDAQ:INFI). Overall, the stock didn’t see a lot of action from investors tracked by us during the third quarter. At the end of this article we will also compare INFI to other stocks including SAExploration Holdings, Inc. (NASDAQ:SAEX), Sunshine Bancorp Inc (NASDAQ:SBCP), and Computer Task Group, Inc. (NASDAQ:CTG) to get a better sense of its popularity.
Follow Infinity Pharmaceuticals Inc. (NASDAQ:INFI)
Follow Infinity Pharmaceuticals Inc. (NASDAQ:INFI)
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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Now, we’re going to review the recent action regarding Infinity Pharmaceuticals Inc. (NASDAQ:INFI).
What does the smart money think about Infinity Pharmaceuticals Inc. (NASDAQ:INFI)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged over the quarter. The graph below displays the number of hedge funds with bullish position in INFI over the last five quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mark Lampert’s Biotechnology Value Fund / BVF Inc has the largest position in Infinity Pharmaceuticals Inc. (NASDAQ:INFI), worth close to $8 million, comprising 1.5% of its total 13F portfolio. The second largest stake is held by Samuel Isaly’s OrbiMed Advisors, which disclosed a $5.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions comprise James E. Flynn’s Deerfield Management, Jim Simons’ Renaissance Technologies, and Julian Baker and Felix Baker’s Baker Bros. Advisors. 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.
On the other hand, some money managers that elected to cut their full holdings between July and September. At the top of the heap, Malcolm Fairbairn’s Ascend Capital cut the biggest position of the “upper crust” of funds studied by Insider Monkey, valued at an estimated $0.3 million in stock.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Infinity Pharmaceuticals Inc. (NASDAQ:INFI) but similarly valued. These stocks are SAExploration Holdings, Inc. (NASDAQ:SAEX), Sunshine Bancorp Inc (NASDAQ:SBCP), Computer Task Group, Inc. (NASDAQ:CTG), and Cumulus Media Inc (NASDAQ:CMLS). This group of stocks’ market caps match INFI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAEX | 6 | 43568 | 1 |
| SBCP | 6 | 13812 | 1 |
| CTG | 5 | 12226 | 0 |
| CMLS | 12 | 13298 | -3 |
As you can see these stocks had an average of eight hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $22 million in INFI’s case. Cumulus Media Inc (NASDAQ:CMLS) is the most popular stock in this table. On the other hand Computer Task Group, Inc. (NASDAQ:CTG) is the least popular one with only five bullish hedge fund positions. Compared to these stocks Infinity Pharmaceuticals Inc. (NASDAQ:INFI) 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
