Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards SELLAS Life Sciences Group, Inc. (NASDAQ:SLS).
Is SLS a good stock to buy? SELLAS Life Sciences Group, Inc. (NASDAQ:SLS) has seen an increase in enthusiasm from smart money lately. SELLAS Life Sciences Group, Inc. (NASDAQ:SLS) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. Our calculations also showed that SLS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the 21st century investor’s toolkit there are tons of indicators shareholders have at their disposal to assess their holdings. A duo of the most innovative indicators are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the elite money managers can outpace the broader indices by a very impressive amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 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. Keeping this in mind let’s take a glance at the fresh hedge fund action regarding SELLAS Life Sciences Group, Inc. (NASDAQ:SLS).
Do Hedge Funds Think SLS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 300% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in SLS a year ago. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ikarian Capital, managed by Neil Shahrestani, holds the largest position in SELLAS Life Sciences Group, Inc. (NASDAQ:SLS). Ikarian Capital has a $0.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Ikarian Capital’s heels is Ken Griffin of Citadel Investment Group, with a $0.4 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include Greg Eisner’s Engineers Gate Manager, Ken Griffin’s Citadel Investment Group and Matthew L Pinz’s Pinz Capital. In terms of the portfolio weights assigned to each position Pinz Capital allocated the biggest weight to SELLAS Life Sciences Group, Inc. (NASDAQ:SLS), around 0.03% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to SLS.
As one would reasonably expect, some big names were leading the bulls’ herd. Ikarian Capital, managed by Neil Shahrestani, initiated the most outsized position in SELLAS Life Sciences Group, Inc. (NASDAQ:SLS). Ikarian Capital had $0.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Matthew L Pinz’s Pinz Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SELLAS Life Sciences Group, Inc. (NASDAQ:SLS) but similarly valued. We will take a look at Phoenix New Media Ltd (NYSE:FENG), VAALCO Energy, Inc. (NYSE:EGY), PC Tel Inc (NASDAQ:PCTI), Cidara Therapeutics Inc (NASDAQ:CDTX), S&W Seed Company (NASDAQ:SANW), Meten EdtechX Education Group Ltd. (NASDAQ:METX), and Eyenovia, Inc. (NASDAQ:EYEN). This group of stocks’ market valuations resemble SLS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FENG | 5 | 2684 | 0 |
| EGY | 6 | 11733 | -1 |
| PCTI | 10 | 27772 | 0 |
| CDTX | 6 | 13667 | 0 |
| SANW | 7 | 78119 | 1 |
| METX | 2 | 772 | -1 |
| EYEN | 6 | 3811 | 2 |
| Average | 6 | 19794 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $1 million in SLS’s case. PC Tel Inc (NASDAQ:PCTI) is the most popular stock in this table. On the other hand Meten EdtechX Education Group Ltd. (NASDAQ:METX) is the least popular one with only 2 bullish hedge fund positions. SELLAS Life Sciences Group, Inc. (NASDAQ:SLS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SLS is 37.6. 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. 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 still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on SLS as the stock returned 33.8% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
Follow Sellas Life Sciences Group Inc. (NASDAQ:SLS)
Follow Sellas Life Sciences Group Inc. (NASDAQ:SLS)
Disclosure: None. This article was originally published at Insider Monkey.
