In this article you are going to find out whether hedge funds think TG Therapeutics Inc (NASDAQ:TGTX) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is TGTX stock a buy or sell? TG Therapeutics Inc (NASDAQ:TGTX) has experienced an increase in activity from the world’s largest hedge funds lately. TG Therapeutics Inc (NASDAQ:TGTX) was in 38 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 34. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 30 hedge funds in our database with TGTX holdings at the end of September. Our calculations also showed that TGTX 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). 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.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy 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 recent hedge fund action encompassing TG Therapeutics Inc (NASDAQ:TGTX).
Do Hedge Funds Think TGTX Is A Good Stock To Buy Now?
At Q4’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from the third quarter of 2020. By comparison, 22 hedge funds held shares or bullish call options in TGTX a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in TG Therapeutics Inc (NASDAQ:TGTX) was held by RA Capital Management, which reported holding $451.8 million worth of stock at the end of December. It was followed by Alkeon Capital Management with a $212.1 million position. Other investors bullish on the company included Maverick Capital, Lion Point, and D E Shaw. In terms of the portfolio weights assigned to each position Lion Point allocated the biggest weight to TG Therapeutics Inc (NASDAQ:TGTX), around 13.3% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, dishing out 6.32 percent of its 13F equity portfolio to TGTX.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Ardsley Partners, managed by Philip Hempleman, initiated the biggest position in TG Therapeutics Inc (NASDAQ:TGTX). Ardsley Partners had $20.8 million invested in the company at the end of the quarter. Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management also made a $10.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Joseph Samuels’s Islet Management, Matthew L Pinz’s Pinz Capital, and Farallon Capital.
Let’s check out hedge fund activity in other stocks similar to TG Therapeutics Inc (NASDAQ:TGTX). We will take a look at Lumentum Holdings Inc (NASDAQ:LITE), Vornado Realty Trust (NYSE:VNO), Ares Capital Corporation (NASDAQ:ARCC), Zions Bancorporation, National Association (NASDAQ:ZION), Robert Half International Inc. (NYSE:RHI), National Retail Properties, Inc. (NYSE:NNN), and Sealed Air Corporation (NYSE:SEE). This group of stocks’ market valuations are closest to TGTX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LITE | 39 | 545949 | -1 |
| VNO | 23 | 178548 | 3 |
| ARCC | 15 | 102905 | -7 |
| ZION | 28 | 169688 | 4 |
| RHI | 27 | 235758 | -2 |
| NNN | 14 | 306163 | -2 |
| SEE | 32 | 900709 | 1 |
| Average | 25.4 | 348531 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.4 hedge funds with bullish positions and the average amount invested in these stocks was $349 million. That figure was $1312 million in TGTX’s case. Lumentum Holdings Inc (NASDAQ:LITE) is the most popular stock in this table. On the other hand National Retail Properties, Inc. (NYSE:NNN) is the least popular one with only 14 bullish hedge fund positions. TG Therapeutics Inc (NASDAQ:TGTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TGTX is 88. 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 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately TGTX wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on TGTX were disappointed as the stock returned -5.6% since the end of December (through 3/19) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
