A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Vallon Pharmaceuticals, Inc. (NASDAQ:VLON).
Is VLON a good stock to buy? Hedge funds were becoming hopeful. The number of long hedge fund bets rose by 3 lately. Vallon Pharmaceuticals, Inc. (NASDAQ:VLON) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that VLON isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To the average investor there are many formulas market participants put to use to analyze stocks. A couple of the most under-the-radar formulas are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the elite investment managers can outperform the broader indices by a superb margin (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 .
Israel Englander of Millennium Management
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Do Hedge Funds Think VLON Is A Good Stock To Buy Now?
At first quarter’s end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3 from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in VLON over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Ikarian Capital held the most valuable stake in Vallon Pharmaceuticals, Inc. (NASDAQ:VLON), which was worth $0.6 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $0.1 million worth of shares. AIGH Investment Partners 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 Ikarian Capital allocated the biggest weight to Vallon Pharmaceuticals, Inc. (NASDAQ:VLON), around 0.02% of its 13F portfolio. AIGH Investment Partners is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to VLON.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Ikarian Capital, managed by Neil Shahrestani, initiated the most valuable position in Vallon Pharmaceuticals, Inc. (NASDAQ:VLON). Ikarian Capital had $0.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new VLON position is Orin Hirschman’s AIGH Investment Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Vallon Pharmaceuticals, Inc. (NASDAQ:VLON) but similarly valued. We will take a look at Cohen & Company Inc. (NYSE:COHN), Viveve Medical, Inc. (NASDAQ:VIVE), ThermoGenesis Holdings, Inc. (NASDAQ:THMO), Neovasc Inc. (NASDAQ:NVCN), Ossen Innovation Co Ltd (NASDAQ:OSN), Sigma Labs, Inc. (NASDAQ:SGLB), and Supercom Ltd (NASDAQ:SPCB). This group of stocks’ market caps are closest to VLON’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COHN | 2 | 1142 | 2 |
| VIVE | 2 | 130 | 2 |
| THMO | 1 | 244 | 1 |
| NVCN | 5 | 1416 | 2 |
| OSN | 1 | 481 | 0 |
| SGLB | 3 | 627 | 1 |
| SPCB | 1 | 122 | -2 |
| Average | 2.1 | 595 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.1 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $1 million in VLON’s case. Neovasc Inc. (NASDAQ:NVCN) is the most popular stock in this table. On the other hand ThermoGenesis Holdings, Inc. (NASDAQ:THMO) is the least popular one with only 1 bullish hedge fund positions. Vallon Pharmaceuticals, Inc. (NASDAQ:VLON) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VLON is 48. 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. Hedge funds were also right about betting on VLON, though not to the same extent, as the stock returned 7.3% since Q1 (through June 11th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.