Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of NeuBase Therapeutics, Inc. (NASDAQ:NBSE).
NeuBase Therapeutics, Inc. (NASDAQ:NBSE) has seen a decrease in hedge fund sentiment lately. NBSE was in 5 hedge funds’ portfolios at the end of the first quarter of 2020. There were 6 hedge funds in our database with NBSE positions at the end of the previous quarter. Our calculations also showed that NBSE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s analyze the fresh hedge fund action surrounding NeuBase Therapeutics, Inc. (NASDAQ:NBSE).
What have hedge funds been doing with NeuBase Therapeutics, Inc. (NASDAQ:NBSE)?
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. By comparison, 2 hedge funds held shares or bullish call options in NBSE a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, Greenlight Capital was the largest shareholder of NeuBase Therapeutics, Inc. (NASDAQ:NBSE), with a stake worth $11 million reported as of the end of September. Trailing Greenlight Capital was Renaissance Technologies, which amassed a stake valued at $2.7 million. OrbiMed Advisors, Millennium Management, and ExodusPoint Capital 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 Greenlight Capital allocated the biggest weight to NeuBase Therapeutics, Inc. (NASDAQ:NBSE), around 1.56% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, designating 0.04 percent of its 13F equity portfolio to NBSE.
Because NeuBase Therapeutics, Inc. (NASDAQ:NBSE) has experienced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedge funds that slashed their entire stakes by the end of the first quarter. Intriguingly, Ken Griffin’s Citadel Investment Group dropped the biggest position of all the hedgies followed by Insider Monkey, comprising an estimated $0.1 million in stock, and Frederick DiSanto’s Ancora Advisors was right behind this move, as the fund sold off about $0 million worth. These transactions are interesting, as total hedge fund interest was cut by 1 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as NeuBase Therapeutics, Inc. (NASDAQ:NBSE) but similarly valued. These stocks are Fang Holdings Limited (NYSE:SFUN), Evelo Biosciences, Inc. (NASDAQ:EVLO), County Bancorp, Inc. (NASDAQ:ICBK), and Farmer Brothers Co. (NASDAQ:FARM). This group of stocks’ market valuations resemble NBSE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SFUN | 4 | 882 | -2 |
| EVLO | 3 | 185 | 0 |
| ICBK | 5 | 8535 | -2 |
| FARM | 16 | 39910 | 4 |
| Average | 7 | 12378 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $17 million in NBSE’s case. Farmer Brothers Co. (NASDAQ:FARM) is the most popular stock in this table. On the other hand Evelo Biosciences, Inc. (NASDAQ:EVLO) is the least popular one with only 3 bullish hedge fund positions. NeuBase Therapeutics, Inc. (NASDAQ:NBSE) is not the least popular stock in this group but hedge fund interest is still below average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately NBSE wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); NBSE investors were disappointed as the stock returned 9.6% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
