The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider MEI Pharma Inc (NASDAQ:MEIP) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is MEI Pharma Inc (NASDAQ:MEIP) the right investment to pursue these days? Hedge funds were becoming hopeful. The number of bullish hedge fund positions went up by 1 in recent months. MEI Pharma Inc (NASDAQ:MEIP) was in 17 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 20. Our calculations also showed that MEIP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 16 hedge funds in our database with MEIP holdings at the end of December.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Keeping this in mind let’s go over the fresh hedge fund action surrounding MEI Pharma Inc (NASDAQ:MEIP).
Do Hedge Funds Think MEIP Is A Good Stock To Buy Now?
At the end of March, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in MEIP a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in MEI Pharma Inc (NASDAQ:MEIP) was held by Biotechnology Value Fund / BVF Inc, which reported holding $12.3 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $8 million position. Other investors bullish on the company included Burrage Capital Management, Sectoral Asset Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Burrage Capital Management allocated the biggest weight to MEI Pharma Inc (NASDAQ:MEIP), around 6.48% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, designating 0.78 percent of its 13F equity portfolio to MEIP.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, created the biggest position in MEI Pharma Inc (NASDAQ:MEIP). Sectoral Asset Management had $6.7 million invested in the company at the end of the quarter. Michael Rockefeller and KarláKroeker’s Woodline Partners also made a $2.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Greg Eisner’s Engineers Gate Manager.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as MEI Pharma Inc (NASDAQ:MEIP) but similarly valued. These stocks are Old Second Bancorp Inc. (NASDAQ:OSBC), Fulcrum Therapeutics, Inc. (NASDAQ:FULC), ASA Gold and Precious Metals Ltd (NYSE:ASA), Lava Therapeutics B.V. (NASDAQ:LVTX), Takung Art Co., Ltd. (NYSE:TKAT), Spirit of Texas Bancshares, Inc. (NASDAQ:STXB), and Citizens & Northern Corporation (NASDAQ:CZNC). This group of stocks’ market values resemble MEIP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSBC | 7 | 15330 | -2 |
| FULC | 17 | 86329 | 0 |
| ASA | 6 | 12413 | -1 |
| LVTX | 12 | 62353 | 12 |
| TKAT | 1 | 335 | 0 |
| STXB | 9 | 23323 | 1 |
| CZNC | 3 | 3965 | -1 |
| Average | 7.9 | 29150 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.9 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $62 million in MEIP’s case. Fulcrum Therapeutics, Inc. (NASDAQ:FULC) is the most popular stock in this table. On the other hand Takung Art Co., Ltd. (NYSE:TKAT) is the least popular one with only 1 bullish hedge fund positions. MEI Pharma Inc (NASDAQ:MEIP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MEIP is 81.5. 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 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately MEIP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MEIP were disappointed as the stock returned -24.5% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Mei Pharma Inc. (NASDAQ:MEIP)
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Disclosure: None. This article was originally published at Insider Monkey.
