Is Calithera Biosciences Inc (NASDAQ:CALA) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Calithera Biosciences Inc (NASDAQ:CALA) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. The stock market echoed a similar sentiment for the shares of Calithera Biosciences Inc (NASDAQ:CALA), as they dropped 23.95% during the quarter. We will find out more about the hedge funds that held stake in the company at the end of the last quarter.
For a better understanding of the hedge fund behavior, we will also compare Calithera Biosciences Inc (NASDAQ:CALA) to other stocks, including Alimera Sciences Inc (NASDAQ:ALIM), First Trust Strategic High Income Fd II (NYSE:FHY), and Quinpario Acquisition Corp (NASDAQ:JASN) to get a better sense of its popularity.
Follow Calithera Biosciences Inc. (NASDAQ:CALA)
Follow Calithera Biosciences Inc. (NASDAQ:CALA)
According to most investors, hedge funds are perceived as worthless, old financial vehicles of years past. While there are more than 8000 funds in operation today, our experts look at the top tier of this group, approximately 700 funds. Most estimates calculate that this group of people manage most of all hedge funds’ total capital, and by tailing their matchless picks, Insider Monkey has come up with a few investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, we’re going to take a look at the recent action regarding Calithera Biosciences Inc (NASDAQ:CALA).
What have hedge funds been doing with Calithera Biosciences Inc (NASDAQ:CALA)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 17% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Phill Gross and Robert Atchinson’s Adage Capital Management has the biggest position in Calithera Biosciences Inc (NASDAQ:CALA), worth close to $17 million, amounting to less than 0.1% of its total 13F portfolio. On Adage Capital Management’s heels is Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, which holds a $2.5 million position; 0.5% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions consist of Oleg Nodelman’s EcoR1 Capital, Paul Orlin and Alex Porter’s Amici Capital, and Ken Griffin’s Citadel Investment Group.
Since Calithera Biosciences Inc (NASDAQ:CALA) has witnessed a falling interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of funds who sold off their positions entirely heading into Q4. It’s worth mentioning that Mike Vranos’ Ellington dropped the largest investment of the “upper crust” of funds watched by Insider Monkey, valued at close to $0.6 million in stock, and Matthew Strobeck’s Birchview Capital was right behind this move, as the fund cut about $0.1 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 fund heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Calithera Biosciences Inc (NASDAQ:CALA). We will take a look at Alimera Sciences Inc (NASDAQ:ALIM), First Trust Strategic High Income Fd II (NYSE:FHY), Quinpario Acquisition Corp (NASDAQ:JASN), and Sotherly Hotels Inc (NASDAQ:SOHO). All of these stocks’ market caps match Calithera Biosciences Inc (NASDAQ:CALA)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALIM | 10 | 35337 | -1 |
| FHY | 4 | 5106 | 0 |
| JASN | 13 | 39518 | -2 |
| SOHO | 5 | 3291 | 1 |
As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $22 million in Calithera Biosciences Inc (NASDAQ:CALA)’s case. Quinpario Acquisition Corp (NASDAQ:JASN) is the most popular stock in this table. On the other hand, First Trust Strategic High Income Fd II (NYSE:FHY) is the least popular one with only 4 bullish hedge fund positions. Calithera Biosciences Inc (NASDAQ:CALA) 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 are piling on. In this regard, Quinpario Acquisition Corp (NASDAQ:JASN) might be a better candidate to consider a long position.
