The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Marinus Pharmaceuticals Inc (NASDAQ:MRNS) from the perspective of those elite funds.
Marinus Pharmaceuticals Inc (NASDAQ:MRNS) has experienced an increase in hedge fund interest in recent months. MRNS was in 7 hedge funds’ portfolios at the end of the third quarter of 2015. There were 3 hedge funds in our database with MRNS holdings at the end of the previous quarter. 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 Pure Cycle Corporation (NASDAQ:PCYO), Energy Focus Inc (PINK:EFOI), and TRACON Pharmaceuticals Inc (NASDAQ:TCON) to gather more data points.
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Keeping this in mind, we’re going to view the recent action encompassing Marinus Pharmaceuticals Inc (NASDAQ:MRNS).
Hedge fund activity in Marinus Pharmaceuticals Inc (NASDAQ:MRNS)
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 133% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Steve Cohen’s Point72 Asset Management has the largest position in Marinus Pharmaceuticals Inc (NASDAQ:MRNS), worth close to $1.9 million, amounting to less than 0.1% of its total 13F portfolio. On Point72 Asset Management’s heels is Julian Baker and Felix Baker of Baker Bros. Advisors, with a $1.7 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism consist of Stuart Weisbrod’s Iguana Healthcare Management, William Leland Edwards’s Palo Alto Investors and Nathan Fischel’s DAFNA Capital Management.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Iguana Healthcare Management, managed by Stuart Weisbrod, initiated the most valuable position in Marinus Pharmaceuticals Inc (NASDAQ:MRNS). Iguana Healthcare Management had $0.6 million invested in the company at the end of the quarter. William Leland Edwards’s Palo Alto Investors also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new MRNS investors: Peter Muller’s PDT Partners and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks similar to Marinus Pharmaceuticals Inc (NASDAQ:MRNS). We will take a look at Pure Cycle Corporation (NASDAQ:PCYO), Energy Focus Inc (PINK:EFOI), TRACON Pharmaceuticals Inc (NASDAQ:TCON), and Xenon Pharmaceuticals Inc (NASDAQ:XENE). This group of stocks’ market values are similar to MRNS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PCYO | 8 | 51382 | 1 |
| EFOI | 6 | 2216 | 5 |
| TCON | 5 | 12671 | 0 |
| XENE | 8 | 21808 | -1 |
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $5 million in MRNS’s case. Pure Cycle Corporation (NASDAQ:PCYO) is the most popular stock in this table. On the other hand TRACON Pharmaceuticals Inc (NASDAQ:TCON) is the least popular one with only 5 bullish hedge fund positions. Marinus Pharmaceuticals Inc (NASDAQ:MRNS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PCYO might be a better candidate to consider a long position.