Does MEI Pharma Inc (NASDAQ:MEIP) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
MEI Pharma Inc (NASDAQ:MEIP) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds’ portfolios at the end of the third quarter of 2019. At the end of this article, we will also compare MEIP to other stocks including Pointer Telocation Limited (NASDAQ:PNTR), COMSCORE, Inc. (NASDAQ:SCOR), and Bancorp of New Jersey, Inc (NYSE:BKJ) to get a better sense of its popularity.
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David Harding of Winton Capital Management
We leave no stone unturned when looking for the next great investment idea. For example, Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to view the fresh hedge fund action regarding MEI Pharma Inc (NASDAQ:MEIP).
What does smart money think about MEI Pharma Inc (NASDAQ:MEIP)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in MEIP a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exist a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Vivo Capital was the largest shareholder of MEI Pharma Inc (NASDAQ:MEIP), with a stake worth $9.5 million reported as of the end of September. Trailing Vivo Capital was Perceptive Advisors, which amassed a stake valued at $7.4 million. Renaissance Technologies, Biotechnology Value Fund, and Millennium Management were 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, Vivo Capital allocated the biggest weight to MEI Pharma Inc (NASDAQ:MEIP), around 1.08% of its 13F portfolio. Biotechnology Value Fund is also relatively very bullish on the stock, designating 0.39 percent of its 13F equity portfolio to MEIP.
Seeing as MEI Pharma Inc (NASDAQ:MEIP) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there was a specific group of fund managers that decided to sell off their full holdings last quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group dropped the biggest investment of the 750 funds watched by Insider Monkey, valued at close to $0.2 million in stock, and David Kowitz and Sheldon Kasowitz’s Indus Capital was right behind this move, as the fund dropped about $0.1 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as MEI Pharma Inc (NASDAQ:MEIP) but similarly valued. These stocks are Pointer Telocation Limited (NASDAQ:PNTR), COMSCORE, Inc. (NASDAQ:SCOR), Bancorp of New Jersey, Inc (NYSE:BKJ), and Sutter Rock Capital Corp. (NASDAQ:SSSS). This group of stocks’ market valuations matches MEIP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PNTR | 2 | 5370 | -2 |
| SCOR | 18 | 38378 | 1 |
| BKJ | 4 | 7001 | 4 |
| SSSS | 8 | 6366 | 2 |
| Average | 8 | 14279 | 1.25 |
View the table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $30 million in MEIP’s case. COMSCORE, Inc. (NASDAQ:SCOR) is the most popular stock in this table. On the other hand, Pointer Telocation Limited (NASDAQ:PNTR) is the least popular one with only 2 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 calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on MEIP as the stock returned 16.7% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
