Is Puma Biotechnology Inc (NYSE:PBYI) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Puma Biotechnology Inc investors should pay attention to a decrease in enthusiasm from smart money recently. PBYI was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 29 hedge funds in our database with PBYI 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 United Natural Foods, Inc. (NASDAQ:UNFI), Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), and Tech Data Corp (NASDAQ:TECD) to gather more data points.
Follow Puma Biotechnology Inc. (NYSE:PBYI)
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Keeping this in mind, we’re going to take a look at the fresh action regarding Puma Biotechnology Inc (NYSE:PBYI).
What does the smart money think about Puma Biotechnology Inc (NYSE:PBYI)?
Heading into Q4, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -38% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the number one position in Puma Biotechnology Inc (NYSE:PBYI). Adage Capital Management has a $428.5 million position in the stock, comprising 1.2% of its 13F portfolio. The second most bullish fund manager is Samuel Isaly of OrbiMed Advisors, with a $90.1 million position; 0.9% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions comprise Columbus Circle Investors, and Steve Cohen’s Point72 Asset Management.
Seeing as Puma Biotechnology Inc (NYSE:PBYI) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers who were dropping their entire stakes heading into Q4. Intriguingly, Joseph Edelman’s Perceptive Advisors said goodbye to the biggest stake of the “upper crust” of funds tracked by Insider Monkey, valued at about $11.7 million in stock, and Zach Schreiber’s Point State Capital was right behind this move, as the fund dropped about $4.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 11 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Puma Biotechnology Inc (NYSE:PBYI) but similarly valued. These stocks are United Natural Foods, Inc. (NASDAQ:UNFI), Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), Tech Data Corp (NASDAQ:TECD), and AMAYA INC (NASDAQ:AYA). All of these stocks’ market caps resemble PBYI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UNFI | 16 | 200869 | 1 |
| SBGI | 31 | 529314 | -1 |
| TECD | 25 | 195273 | 5 |
| AYA | 18 | 663333 | -1 |
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $397 million. That figure was $760 million in PBYI’s case. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) is the most popular stock in this table. On the other hand United Natural Foods, Inc. (NASDAQ:UNFI) is the least popular one with only 16 bullish hedge fund positions. Puma Biotechnology Inc (NYSE:PBYI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SBGI might be a better candidate to consider a long position.
