After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards TherapeuticsMD Inc (NASDAQ:TXMD).
TherapeuticsMD Inc (NASDAQ:TXMD) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. TherapeuticsMD Inc (NASDAQ:TXMD) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 18. There were 14 hedge funds in our database with TXMD positions at the end of the first quarter. Our calculations also showed that TXMD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. Now let’s take a look at the recent hedge fund action encompassing TherapeuticsMD Inc (NASDAQ:TXMD).
Do Hedge Funds Think TXMD Is A Good Stock To Buy Now?
At Q2’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in TXMD a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, RA Capital Management held the most valuable stake in TherapeuticsMD Inc (NASDAQ:TXMD), which was worth $9.3 million at the end of the second quarter. On the second spot was Rubric Capital Management which amassed $3.3 million worth of shares. Millennium Management, Laurion Capital Management, and Citadel Investment Group 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 Rubric Capital Management allocated the biggest weight to TherapeuticsMD Inc (NASDAQ:TXMD), around 0.21% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to TXMD.
Judging by the fact that TherapeuticsMD Inc (NASDAQ:TXMD) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of money managers who were dropping their full holdings by the end of the second quarter. It’s worth mentioning that Joseph Edelman’s Perceptive Advisors cut the largest position of the “upper crust” of funds tracked by Insider Monkey, valued at about $3.7 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dropped its stock, about $0.8 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 4 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks similar to TherapeuticsMD Inc (NASDAQ:TXMD). We will take a look at Benefitfocus Inc (NASDAQ:BNFT), Viking Therapeutics, Inc. (NASDAQ:VKTX), Daily Journal Corporation (NASDAQ:DJCO), Seneca Foods Corp. (NASDAQ:SENEB), AXT Inc (NASDAQ:AXTI), Mesabi Trust (NYSE:MSB), and Tredegar Corporation (NYSE:TG). This group of stocks’ market caps are closest to TXMD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BNFT | 16 | 136058 | -1 |
| VKTX | 13 | 29997 | 0 |
| DJCO | 3 | 4554 | 2 |
| SENEB | 2 | 2497 | 0 |
| AXTI | 11 | 29815 | 0 |
| MSB | 4 | 88678 | 2 |
| TG | 12 | 48191 | 3 |
| Average | 8.7 | 48541 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.7 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $18 million in TXMD’s case. Benefitfocus Inc (NASDAQ:BNFT) is the most popular stock in this table. On the other hand Seneca Foods Corp. (NASDAQ:SENEB) is the least popular one with only 2 bullish hedge fund positions. TherapeuticsMD Inc (NASDAQ:TXMD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TXMD is 46.2. 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 positive signal but 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately TXMD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TXMD were disappointed as the stock returned -37% since the end of June (through 9/27) 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 many of these stocks already outperformed the market since 2019.
Follow Therapeuticsmd Inc. (NYSEMKT:TXMD)
Follow Therapeuticsmd Inc. (NYSEMKT:TXMD)
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Disclosure: None. This article was originally published at Insider Monkey.
