In this article we are going to use hedge fund sentiment as a tool and determine whether Beyond Air, Inc. (NASDAQ:XAIR) is a good investment right now. We like to analyze hedge fund sentiment before conducting 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 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.
Beyond Air, Inc. (NASDAQ:XAIR) investors should be aware of an increase in hedge fund sentiment lately. Beyond Air, Inc. (NASDAQ:XAIR) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic was 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 4 hedge funds in our database with XAIR positions at the end of the fourth quarter. Our calculations also showed that XAIR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
If you’d ask most stock holders, hedge funds are perceived as unimportant, old financial tools of the past. While there are greater than 8000 funds in operation at the moment, Our researchers choose to focus on the bigwigs of this club, around 850 funds. It is estimated that this group of investors have their hands on most of the smart money’s total asset base, and by keeping an eye on their first-class stock picks, Insider Monkey has uncovered many investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Mark Kingdon of Kingdon Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. Now let’s go over the key hedge fund action regarding Beyond Air, Inc. (NASDAQ:XAIR).
Do Hedge Funds Think XAIR Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in XAIR over the last 23 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Kingdon Capital, managed by Mark Kingdon, holds the biggest position in Beyond Air, Inc. (NASDAQ:XAIR). Kingdon Capital has a $3.8 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is John Overdeck and David Siegel of Two Sigma Advisors, with a $1.6 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 include Ken Griffin’s Citadel Investment Group, Renaissance Technologies and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position 0 allocated the biggest weight to Beyond Air, Inc. (NASDAQ:XAIR), around 0.39% of its 13F portfolio. 0 is also relatively very bullish on the stock, earmarking 0.0043 percent of its 13F equity portfolio to XAIR.
As industrywide interest jumped, some big names have jumped into Beyond Air, Inc. (NASDAQ:XAIR) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the largest position in Beyond Air, Inc. (NASDAQ:XAIR). Two Sigma Advisors had $1.6 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.3 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Beyond Air, Inc. (NASDAQ:XAIR). We will take a look at Evolution Petroleum Corporation (NYSE:EPM), Blue Apron Holdings, Inc. (NYSE:APRN), LEAP THERAPEUTICS, INC. (NASDAQ:LPTX), Broadwind Inc. (NASDAQ:BWEN), Evaxion Biotech A/S (NASDAQ:EVAX), iSun, Inc. (NASDAQ:ISUN), and China Customer Relations Centers, Inc. (NASDAQ:CCRC). All of these stocks’ market caps resemble XAIR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPM | 9 | 10311 | -1 |
| APRN | 9 | 3349 | 1 |
| LPTX | 10 | 28533 | -2 |
| BWEN | 3 | 3781 | -1 |
| EVAX | 3 | 2987 | 3 |
| ISUN | 1 | 140 | 1 |
| CCRC | 2 | 1295 | 0 |
| Average | 5.3 | 7199 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.3 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $6 million in XAIR’s case. LEAP THERAPEUTICS, INC. (NASDAQ:LPTX) is the most popular stock in this table. On the other hand iSun, Inc. (NASDAQ:ISUN) is the least popular one with only 1 bullish hedge fund positions. Beyond Air, Inc. (NASDAQ:XAIR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for XAIR is 58.2. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately XAIR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); XAIR investors were disappointed as the stock returned -6.7% since the end of March (through 6/18) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
