Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Tenax Therapeutics Inc (NASDAQ:TENX) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of the third quarter of 2016. 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 OHA Investment Corp (NASDAQ:OHAI), MEI Pharma Inc (NASDAQ:MEIP), and AMREP Corporation (NYSE:AXR) to gather more data points.
Follow Tenax Therapeutics Inc. (NASDAQ:TENX)
Follow Tenax Therapeutics Inc. (NASDAQ:TENX)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, we’re going to analyze the latest action regarding Tenax Therapeutics Inc (NASDAQ:TENX).
Hedge fund activity in Tenax Therapeutics Inc (NASDAQ:TENX)
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in TENX over the last 5 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Hal Mintz’s Sabby Capital has the number one position in Tenax Therapeutics Inc (NASDAQ:TENX), worth close to $5.6 million, amounting to 0.2% of its total 13F portfolio. The second largest stake is held by RA Capital Management, led by Peter Kolchinsky, holding a $5.5 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish consist of Kevin Kotler’s Broadfin Capital, Jeffrey Jay and David Kroin’s Great Point Partners and Steven Boyd’s Armistice Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: DAFNA Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Renaissance Technologies).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Tenax Therapeutics Inc (NASDAQ:TENX) but similarly valued. We will take a look at OHA Investment Corp (NASDAQ:OHAI), MEI Pharma Inc (NASDAQ:MEIP), AMREP Corporation (NYSE:AXR), and Turtle Beach Corp (NASDAQ:HEAR). This group of stocks’ market valuations are closest to TENX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OHAI | 4 | 2938 | 0 |
| MEIP | 6 | 2687 | 6 |
| AXR | 4 | 4799 | 4 |
| HEAR | 4 | 1342 | 4 |
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $23 million in TENX’s case. MEI Pharma Inc (NASDAQ:MEIP) is the most popular stock in this table. On the other hand OHA Investment Corp (NASDAQ:OHAI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Tenax Therapeutics Inc (NASDAQ:TENX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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