Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of XOMA Corp (NASDAQ:XOMA) based on that data.
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XOMA Corp (NASDAQ:XOMA) investors should pay attention to a decrease in enthusiasm from smart money in recent months. At the end of this article we will also compare XOMA Corp to other stocks including USA Technologies, Inc. (NASDAQ:USAT), Imation Corp. (NYSE:IMN), and Eastern Virginia Bankshares, Inc. (NASDAQ:EVBS) to get a better sense of its popularity.
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If you’d ask most investors, hedge funds are viewed as worthless, outdated investment vehicles of yesteryear. While there are over 8000 funds trading at the moment, Experts at hedge fund tracking site Insider Monkey choose to focus on the aristocrats of this group, around 700 funds. These hedge fund managers command most of all hedge funds’ total asset base, and by following their highest performing equity investments, Insider Monkey has spotted a number of investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s take a gander at the recent action encompassing XOMA.
What does the smart money think about XOMA Corp (NASDAQ:XOMA)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish in this stock, a decline of 45% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
According to hedge fund intelligence website Insider Monkey, Opaleye Management, managed by James A. Silverman, holds the most valuable position in XOMA Corp (NASDAQ:XOMA). Opaleye Management has a $2.2 million position in the stock, comprising 1.1% of its 13F portfolio. Coming in second is D E Shaw holding a $1.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies that are bullish comprise William Leland Edwards’ Palo Alto Investors, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.
Since XOMA Corp (NASDAQ:XOMA) has faced declining sentiment from the smart money, it’s safe to say that there were a few hedgies that slashed their entire stakes at the end of the third quarter. Interestingly, Julian Baker and Felix Baker’s Baker Bros. Advisors sold off the biggest stake of the 700 funds watched by Insider Monkey, totaling close to $57 million. Mark Kingdon’s fund, Kingdon Capital, also dumped its stock positions and call options., totaling almost $40 million worth. These bearish behaviors are worrying to say the least, as aggregate hedge fund interest fell by 9 funds at the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to XOMA Corp (NASDAQ:XOMA). We will take a look at USA Technologies, Inc. (NASDAQ:USAT), Imation Corp. (NYSE:IMN), Eastern Virginia Bankshares, Inc. (NASDAQ:EVBS), and Conatus Pharmaceuticals Inc (NASDAQ:CNAT). This group of stocks’ market caps are closest to XOMA Corp (NASDAQ:XOMA)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| USAT | 5 | 2979 | -1 |
| IMN | 9 | 27518 | -1 |
| EVBS | 5 | 8781 | 1 |
| CNAT | 10 | 11657 | 1 |
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. Conatus Pharmaceuticals Inc (NASDAQ:CNAT) is the most popular stock in this table. On the other hand USA Technologies, Inc. (NASDAQ:USAT) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks XOMA Corp (NASDAQ:XOMA) is more popular among hedge funds. However, we don’t like the huge sales by leading healthcare investors and don’t believe investors should go into this stock with their eyes closed.
