Is Fortress Biotech Inc (NASDAQ:FBIO) a good bet right now? We like to analyze hedge fund sentiment before doing 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 (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) 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.
Is Fortress Biotech Inc (NASDAQ:FBIO) the right pick for your portfolio? The smart money is getting more optimistic. The number of long hedge fund bets advanced by 1 lately. FBIO was in 7 hedge funds’ portfolios at the end of the third quarter of 2015. There were 6 hedge funds in our database with FBIO positions at the end of the previous quarter. 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 Independence Contract Drilling Inc (NYSE:ICD), Derma Sciences Inc (NASDAQ:DSCI), and Commercial Vehicle Group, Inc. (NASDAQ:CVGI) to gather more data points.
Follow Fortress Biotech Inc. (NASDAQ:FBIO)
Follow Fortress Biotech Inc. (NASDAQ:FBIO)
To the average investor, there is a multitude of signals market participants employ to assess stocks. A pair of the most under-the-radar signals is composed of hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can outpace the S&P 500 by a very impressive margin (see the details here).
Now, let’s check out the recent action regarding Fortress Biotech Inc (NASDAQ:FBIO).
Hedge fund activity in Fortress Biotech Inc (NASDAQ:FBIO)
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Paul Singer’s Elliott Management has the largest position in Fortress Biotech Inc (NASDAQ:FBIO), worth close to $6.7 million, corresponding to 0.1% of its total 13F portfolio. Coming in second is venBio Select Advisor, managed by Behzad Aghazadeh, which holds a $3.3 million position; 0.9% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions consist of Chuck Royce’s Royce & Associates, and Glenn Russell Dubin’s Highbridge Capital Management.
As one would reasonably expect, key hedge funds have jumped into Fortress Biotech Inc (NASDAQ:FBIO) headfirst. Millennium Management, managed by Israel Englander, established a position in Fortress Biotech Inc (NASDAQ:FBIO). Millennium Management had $0 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0 million position during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Fortress Biotech Inc (NASDAQ:FBIO). These stocks are Independence Contract Drilling Inc (NYSE:ICD), Derma Sciences Inc (NASDAQ:DSCI), Commercial Vehicle Group, Inc. (NASDAQ:CVGI), and Golden Entertainment Inc (NASDAQ:GDEN). This group of stocks’ market valuations are closest to FBIO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICD | 5 | 6922 | 0 |
| DSCI | 17 | 59649 | 0 |
| CVGI | 15 | 27611 | 2 |
| GDEN | 7 | 21102 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $11 million in FBIO’s case. Derma Sciences Inc (NASDAQ:DSCI) is the most popular stock in this table. On the other hand Independence Contract Drilling Inc (NYSE:ICD) is the least popular one with only 5 bullish hedge fund positions. Fortress Biotech Inc (NASDAQ:FBIO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal, and we’d rather spend our time researching stocks that hedge funds hedge funds are collectively the fondest of. In this case DSCI might be a better alternative.
