Is SBTX Stock A Buy or Sell?

The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Silverback Therapeutics, Inc. (NASDAQ:SBTX).

Is SBTX stock a buy? The best stock pickers were getting more optimistic. Silverback Therapeutics, Inc. (NASDAQ:SBTX) was in 24 hedge funds’ portfolios at the end of the fourth quarter of 2020. Our calculations also showed that SBTX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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 124 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Oleg Nodelman of EcoR1 Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 let’s take a peek at the key hedge fund action surrounding Silverback Therapeutics, Inc. (NASDAQ:SBTX).

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

At the end of the fourth quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24 from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SBTX over the last 22 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, OrbiMed Advisors, holds the biggest position in Silverback Therapeutics, Inc. (NASDAQ:SBTX). OrbiMed Advisors has a $405.1 million position in the stock, comprising 3.5% of its 13F portfolio. The second most bullish fund manager is EcoR1 Capital, managed by Oleg Nodelman, which holds a $117.4 million position; 6.3% of its 13F portfolio is allocated to the company. Some other peers with similar optimism encompass Peter Kolchinsky’s RA Capital Management, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management and Bihua Chen’s Cormorant Asset Management. In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Silverback Therapeutics, Inc. (NASDAQ:SBTX), around 6.31% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, earmarking 3.54 percent of its 13F equity portfolio to SBTX.

With a general bullishness amongst the heavyweights, some big names have jumped into Silverback Therapeutics, Inc. (NASDAQ:SBTX) headfirst. OrbiMed Advisors, assembled the most outsized position in Silverback Therapeutics, Inc. (NASDAQ:SBTX). OrbiMed Advisors had $405.1 million invested in the company at the end of the quarter. Oleg Nodelman’s EcoR1 Capital also initiated a $117.4 million position during the quarter. The other funds with brand new SBTX positions are Peter Kolchinsky’s RA Capital Management, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management, and Bihua Chen’s Cormorant Asset Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Silverback Therapeutics, Inc. (NASDAQ:SBTX) but similarly valued. These stocks are Cavco Industries, Inc. (NASDAQ:CVCO), Uniqure NV (NASDAQ:QURE), Cohu, Inc. (NASDAQ:COHU), Ligand Pharmaceuticals Inc. (NASDAQ:LGND), Avaya Holdings Corp. (NYSE:AVYA), Patrick Industries, Inc. (NASDAQ:PATK), and The Macerich Company (NYSE:MAC). This group of stocks’ market caps match SBTX’s market cap.

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As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $202 million. That figure was $772 million in SBTX’s case. Uniqure NV (NASDAQ:QURE) is the most popular stock in this table. On the other hand Cohu, Inc. (NASDAQ:COHU) is the least popular one with only 13 bullish hedge fund positions. Silverback Therapeutics, Inc. (NASDAQ:SBTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBTX is 50. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately SBTX wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on SBTX were disappointed as the stock returned -18.5% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.