In this article we will check out the progression of hedge fund sentiment towards Nuvation Bio Inc. (NYSE:NUVB) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Nuvation Bio Inc. (NYSE:NUVB) a healthy stock for your portfolio? Money managers were in a bullish mood. The number of bullish hedge fund positions increased by 30 recently. Nuvation Bio Inc. (NYSE:NUVB) was in 30 hedge funds’ portfolios at the end of March. Our calculations also showed that NUVB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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.
Oleg Nodelman of EcoR1 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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. With all of this in mind we’re going to take a look at the new hedge fund action surrounding Nuvation Bio Inc. (NYSE:NUVB).
Do Hedge Funds Think NUVB Is A Good Stock To Buy Now?
At the end of March, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30 from the fourth quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in NUVB a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, EcoR1 Capital was the largest shareholder of Nuvation Bio Inc. (NYSE:NUVB), with a stake worth $138.4 million reported as of the end of March. Trailing EcoR1 Capital was Baupost Group, which amassed a stake valued at $82.4 million. Citadel Investment Group, Redmile Group, and Abrams Capital 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 EcoR1 Capital allocated the biggest weight to Nuvation Bio Inc. (NYSE:NUVB), around 6.14% of its 13F portfolio. Ghost Tree Capital is also relatively very bullish on the stock, setting aside 1.17 percent of its 13F equity portfolio to NUVB.
As industrywide interest jumped, specific money managers have jumped into Nuvation Bio Inc. (NYSE:NUVB) headfirst. EcoR1 Capital, managed by Oleg Nodelman, assembled the most valuable position in Nuvation Bio Inc. (NYSE:NUVB). EcoR1 Capital had $138.4 million invested in the company at the end of the quarter. Seth Klarman’s Baupost Group also initiated a $82.4 million position during the quarter. The other funds with brand new NUVB positions are Ken Griffin’s Citadel Investment Group, Jeremy Green’s Redmile Group, and David Abrams’s Abrams Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nuvation Bio Inc. (NYSE:NUVB) but similarly valued. These stocks are Sally Beauty Holdings, Inc. (NYSE:SBH), Globalstar, Inc. (PINK:GSAT), Strategic Education Inc (NASDAQ:STRA), BTRS Holdings Inc. (NASDAQ:BTRS), Bionano Genomics, Inc. (NASDAQ:BNGO), Morphic Holding, Inc. (NASDAQ:MORF), and Retail Properties of America Inc (NYSE:RPAI). This group of stocks’ market values are closest to NUVB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBH | 19 | 127433 | -4 |
| GSAT | 10 | 163384 | 1 |
| STRA | 16 | 232233 | 1 |
| BTRS | 26 | 310999 | 26 |
| BNGO | 10 | 108374 | 5 |
| MORF | 22 | 425543 | 7 |
| RPAI | 9 | 29224 | 3 |
| Average | 16 | 199599 | 5.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $200 million. That figure was $544 million in NUVB’s case. BTRS Holdings Inc. (NASDAQ:BTRS) is the most popular stock in this table. On the other hand Retail Properties of America Inc (NYSE:RPAI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Nuvation Bio Inc. (NYSE:NUVB) is more popular among hedge funds. Our overall hedge fund sentiment score for NUVB is 90. 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. 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Unfortunately NUVB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NUVB were disappointed as the stock returned -10% since the end of the first quarter (through 7/2) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.