Is Phio Pharmaceuticals Corp. (PHIO) A Good Stock To Buy?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Phio Pharmaceuticals Corp. (NASDAQ:PHIO) based on those filings.

Is PHIO a good stock to buy? Phio Pharmaceuticals Corp. (NASDAQ:PHIO) investors should be aware of an increase in enthusiasm from smart money recently. Phio Pharmaceuticals Corp. (NASDAQ:PHIO) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 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 PHIO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

John Overdeck of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $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. With all of this in mind let’s take a look at the recent hedge fund action encompassing Phio Pharmaceuticals Corp. (NASDAQ:PHIO).

Do Hedge Funds Think PHIO Is A Good Stock To Buy Now?

At first quarter’s end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the fourth quarter of 2020. By comparison, 2 hedge funds held shares or bullish call options in PHIO a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Citadel Investment Group was the largest shareholder of Phio Pharmaceuticals Corp. (NASDAQ:PHIO), with a stake worth $0.3 million reported as of the end of March. Trailing Citadel Investment Group was Two Sigma Advisors, which amassed a stake valued at $0.1 million. Citadel Investment Group 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 Sabby Capital allocated the biggest weight to Phio Pharmaceuticals Corp. (NASDAQ:PHIO), around 0.01% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, dishing out 0.0002 percent of its 13F equity portfolio to PHIO.

As one would reasonably expect, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, established the most valuable call position in Phio Pharmaceuticals Corp. (NASDAQ:PHIO). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Hal Mintz’s Sabby Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Phio Pharmaceuticals Corp. (NASDAQ:PHIO) but similarly valued. We will take a look at Eltek Ltd. (NASDAQ:ELTK), Newater Technology, Inc. (NASDAQ:NEWA), Paramount Gold Nevada Corp (NYSE:PZG), Petros Pharmaceuticals, Inc. (NASDAQ:PTPI), ADiTx Therapeutics, Inc. (NASDAQ:ADTX), Conifer Holdings, Inc. (NASDAQ:CNFR), and Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR). This group of stocks’ market values are similar to PHIO’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 1.9 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $0 million in PHIO’s case. Paramount Gold Nevada Corp (NYSE:PZG) is the most popular stock in this table. On the other hand Newater Technology, Inc. (NASDAQ:NEWA) is the least popular one with only 1 bullish hedge fund positions. Phio Pharmaceuticals Corp. (NASDAQ:PHIO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PHIO is 87. 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 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately PHIO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PHIO were disappointed as the stock returned -17.5% since the end of March (through 6/11) 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 many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.