In this article we will take a look at whether hedge funds think SCYNEXIS Inc (NASDAQ:SCYX) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is SCYNEXIS Inc (NASDAQ:SCYX) worth your attention right now? Money managers are in a bearish mood. The number of bullish hedge fund bets shrunk by 3 in recent months. Our calculations also showed that SCYX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are viewed as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds with their doors open at present, Our researchers choose to focus on the top tier of this group, around 850 funds. It is estimated that this group of investors have their hands on bulk of the smart money’s total asset base, and by watching their first-class stock picks, Insider Monkey has unsheathed a few investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Mark Kingdon of Kingdon Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a gander at the key hedge fund action surrounding SCYNEXIS Inc (NASDAQ:SCYX).
How have hedgies been trading SCYNEXIS Inc (NASDAQ:SCYX)?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -43% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SCYX over the last 18 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Mark Kingdon’s Kingdon Capital has the number one position in SCYNEXIS Inc (NASDAQ:SCYX), worth close to $2.1 million, corresponding to 0.4% of its total 13F portfolio. On Kingdon Capital’s heels is Renaissance Technologies, with a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions contain Ted Wang’s Puissance Capital Managementá, Thomas Bailard’s Bailard Inc and . In terms of the portfolio weights assigned to each position Puissance Capital Managementá allocated the biggest weight to SCYNEXIS Inc (NASDAQ:SCYX), around 0.78% of its 13F portfolio. Kingdon Capital is also relatively very bullish on the stock, earmarking 0.38 percent of its 13F equity portfolio to SCYX.
Since SCYNEXIS Inc (NASDAQ:SCYX) has witnessed bearish sentiment from hedge fund managers, we can see that there were a few hedge funds who were dropping their entire stakes last quarter. It’s worth mentioning that Kevin Kotler’s Broadfin Capital cut the largest position of the 750 funds tracked by Insider Monkey, valued at an estimated $1.8 million in stock. Nathan Fischel’s fund, DAFNA Capital Management, also sold off its stock, about $1.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to SCYNEXIS Inc (NASDAQ:SCYX). We will take a look at Monopar Therapeutics Inc. (NASDAQ:MNPR), Battalion Oil Corporation (NYSE:BATL), Battalion Oil Corporation (NYSE:BATL), and PAVmed Inc. (NASDAQ:PAVM). This group of stocks’ market valuations are similar to SCYX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MNPR | 1 | 85 | 0 |
| BATL | 5 | 50077 | 5 |
| BATL | 5 | 50077 | 5 |
| PAVM | 3 | 1457 | 1 |
| Average | 3.5 | 25424 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $3 million in SCYX’s case. Battalion Oil Corporation (NYSE:BATL) is the most popular stock in this table. On the other hand Monopar Therapeutics Inc. (NASDAQ:MNPR) is the least popular one with only 1 bullish hedge fund positions. SCYNEXIS Inc (NASDAQ:SCYX) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately SCYX wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SCYX were disappointed as the stock returned -3.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
