Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX).
Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX) was in 14 hedge funds’ portfolios at the end of the third quarter of 2015. CPRX has seen a decrease in support from the world’s most elite money managers recently. There were 15 hedge funds in our database with CPRX positions at the end of the previous quarter. At the end of this article we will also compare CPRX to other stocks including Superior Uniform Group Inc (NASDAQ:SGC), Electrum Special Acquisition Corp (NASDAQ:ELECU), and Sigma Designs Inc (NASDAQ:SIGM) to get a better sense of its popularity.
According to most stock holders, hedge funds are viewed as worthless, old investment tools of yesteryear. While there are over 8000 funds in operation at the moment, our experts choose to focus on the crème de la crème of this club, approximately 700 funds. Most estimates calculate that this group of people shepherd bulk of the smart money’s total asset base, and by observing their first-class equity investments, Insider Monkey has spotted various investment strategies that have historically outrun the market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Now, let’s take a look at the key action regarding Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX).
What does the smart money think about Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX)?
Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Julian Baker and Felix Baker’s Baker Bros. Advisors has the most valuable position in Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX), worth close to $22 million, corresponding to 0.2% of its total 13F portfolio. Coming in second is Consonance Capital Management, managed by Mitchell Blutt, which holds an $17.4 million position; 2.4% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish comprise Kevin Kotler’s Broadfin Capital, Steve Cohen’s Point72 Asset Management and Joseph Edelman’s Perceptive Advisors.
Due to the fact that Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX) has experienced declining sentiment from hedge fund managers, we can see that there were a few money managers that decided to sell off their positions entirely last quarter. Interestingly, Neil Shah’s March Altus Capital Management sold off the biggest position of all the hedgies tracked by Insider Monkey, totaling an estimated $0.3 million in stock, and Chao Ku’s Nine Chapters Capital Management was right behind this move, as the fund dropped about $0.1 million worth. These moves are interesting, as total hedge fund interest fell by 1 fund last quarter.
On the next page, we analyze hedge fund activity of similarly priced stocks to get a better feel on what the elite funds think of Pharmaceutical Partners, Inc. (NASDAQ:CPRX).