Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 817 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Neurotrope, Inc. (NASDAQ:NTRP).
Hedge fund interest in Neurotrope, Inc. (NASDAQ:NTRP) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that NTRP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Senmiao Technology Limited (NASDAQ:AIHS), Neos Therapeutics Inc (NASDAQ:NEOS), and MV Oil Trust (NYSE:MVO) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. Now we’re going to review the recent hedge fund action regarding Neurotrope, Inc. (NASDAQ:NTRP).
What have hedge funds been doing with Neurotrope, Inc. (NASDAQ:NTRP)?
At the end of September, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. By comparison, 2 hedge funds held shares or bullish call options in NTRP a year ago. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Neurotrope, Inc. (NASDAQ:NTRP), with a stake worth $0.4 million reported as of the end of September. Trailing Renaissance Technologies was One68 Global Capital, which amassed a stake valued at $0.2 million. Two Sigma Advisors was 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 One68 Global Capital allocated the biggest weight to Neurotrope, Inc. (NASDAQ:NTRP), around 0.42% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0004 percent of its 13F equity portfolio to NTRP.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now take a look at hedge fund activity in other stocks similar to Neurotrope, Inc. (NASDAQ:NTRP). We will take a look at Senmiao Technology Limited (NASDAQ:AIHS), Neos Therapeutics Inc (NASDAQ:NEOS), MV Oil Trust (NYSE:MVO), ARCA biopharma, Inc. (NASDAQ:ABIO), Hexindai Inc. (NASDAQ:HX), Hudson Global Inc (NASDAQ:HSON), and Color Star Technology Co., Ltd. (NASDAQ:HHT). This group of stocks’ market values are closest to NTRP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AIHS | 3 | 105 | 2 |
| NEOS | 7 | 5505 | -1 |
| MVO | 1 | 107 | 0 |
| ABIO | 2 | 214 | 1 |
| HX | 1 | 570 | -2 |
| HSON | 1 | 947 | 0 |
| HHT | 1 | 67 | 0 |
| Average | 2.3 | 1074 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.3 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $1 million in NTRP’s case. Neos Therapeutics Inc (NASDAQ:NEOS) is the most popular stock in this table. On the other hand MV Oil Trust (NYSE:MVO) is the least popular one with only 1 bullish hedge fund positions. Neurotrope, Inc. (NASDAQ:NTRP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NTRP is 51.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and beat the market again by 15.4 percentage points. Unfortunately NTRP wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NTRP were disappointed as the stock returned -14.9% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Follow Neurotrope Inc. (OTCMKTS:NTRP)
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Disclosure: None. This article was originally published at Insider Monkey.
