Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT).
Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT) shareholders have witnessed an increase in enthusiasm from smart money recently. However, our calculations also showed that hedge fund sentiment is still quite bearish and OPNT isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s review the new hedge fund action surrounding Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT).
What does smart money think about Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT)?
Heading into the fourth quarter of 2019, a total of 2 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards OPNT over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fondren Management, managed by Bradley Louis Radoff, holds the most valuable position in Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT). Fondren Management has a $4.3 million position in the stock, comprising 3.6% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $0.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Fondren Management allocated the biggest weight to Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT), around 3.57% of its portfolio.
Now, some big names were leading the bulls’ herd. Renaissance Technologies, founded by Jim Simons, established the largest position in Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT). Renaissance Technologies had $0.2 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks similar to Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT). These stocks are SMTC Corporation (NASDAQ:SMTX), Pro-Dex, Inc. (NASDAQ:PDEX), Tottenham Acquisition I Limited (NASDAQ:TOTA), and Obsidian Energy Ltd. (NYSE:OBE). This group of stocks’ market valuations match OPNT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SMTX | 4 | 5246 | 1 |
| PDEX | 4 | 910 | 0 |
| TOTA | 5 | 3935 | 0 |
| OBE | 6 | 3998 | -1 |
| Average | 4.75 | 3522 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.75 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $5 million in OPNT’s case. Obsidian Energy Ltd. (NYSE:OBE) is the most popular stock in this table. On the other hand SMTC Corporation (NASDAQ:SMTX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT) is even less popular than SMTX. Hedge funds dodged a bullet by taking a bearish stance towards OPNT. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately OPNT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); OPNT investors were disappointed as the stock returned -7.7% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
