There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Threshold Pharmaceuticals, Inc. (NASDAQ:THLD) .
Threshold Pharmaceuticals, Inc. (NASDAQ:THLD) investors should pay attention to a decrease in support from the world’s most successful money managers lately. There were 8 hedge funds in our database with THLD positions at the end of September. 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 Cogentix Medical Inc (NASDAQ:CGNT), MoSys Inc. (NASDAQ:MOSY), and CAS Medical Systems Inc (NASDAQ:CASM) to gather more data points.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Now, we’re going to take a look at the new action encompassing Threshold Pharmaceuticals, Inc. (NASDAQ:THLD).
How have hedgies been trading Threshold Pharmaceuticals, Inc. (NASDAQ:THLD)?
Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards THLD over the last 5 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Phill Gross and Robert Atchinson’s Adage Capital Management has the biggest position in Threshold Pharmaceuticals, Inc. (NASDAQ:THLD), worth close to $1.6 million, amounting to less than 0.1% of its total 13F portfolio. The second largest stake is held by Deerfield Management, led by James E. Flynn, which holds a $1.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions consist of Bihua Chen’s Cormorant Asset Management, Renaissance Technologies, one of the largest hedge funds in the world, and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as Threshold Pharmaceuticals, Inc. (NASDAQ:THLD) has faced a decline in interest from hedge fund managers, it’s safe to say that there were a few hedge funds who sold off their entire stakes by the end of the third quarter. At the top of the heap, First Eagle Investment Management dumped the biggest stake of the “upper crust” of funds watched by Insider Monkey, totaling close to $2 million in stock. Michael Castor’s fund, Sio Capital, also said goodbye to its stock, about $0.8 million worth.
Let’s now review hedge fund activity in other stocks similar to Threshold Pharmaceuticals, Inc. (NASDAQ:THLD). These stocks are Cogentix Medical Inc (NASDAQ:CGNT), MoSys Inc. (NASDAQ:MOSY), CAS Medical Systems Inc (NASDAQ:CASM), and Support.com, Inc. (NASDAQ:SPRT). This group of stocks’ market caps are similar to THLD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CGNT | 6 | 9323 | 0 |
| MOSY | 4 | 1174 | 0 |
| CASM | 3 | 6937 | -1 |
| SPRT | 3 | 3612 | 0 |
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $5 million in THLD’s case. Cogentix Medical Inc (NASDAQ:CGNT) is the most popular stock in this table. On the other hand CAS Medical Systems Inc (NASDAQ:CASM) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Threshold Pharmaceuticals, Inc. (NASDAQ:THLD) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
