Is Peregrine Pharmaceuticals (PPHM) A Good Stock To Buy?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Peregrine Pharmaceuticals (NASDAQ:PPHM) .

Is Peregrine Pharmaceuticals (NASDAQ:PPHM) an attractive investment now? Money managers are actually in a bearish mood. The number of long hedge fund positions that are disclosed in regulatory 13F filings experienced a decline of 2 lately. There were 8 hedge funds in our database with PPHM holdings at the end of September. 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 KLR Energy Acquisition Corp (NASDAQ:KLRE), PRGX Global Inc (NASDAQ:PRGX), and pSivida Corp. (NASDAQ:PSDV) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Now, we’re going to analyze the key action surrounding Peregrine Pharmaceuticals (NASDAQ:PPHM).

How are hedge funds trading Peregrine Pharmaceuticals (NASDAQ:PPHM)?

At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in PPHM heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the largest position in Peregrine Pharmaceuticals (NASDAQ:PPHM). Renaissance Technologies has a $1.1 million position in the stock, comprising less than 0.1% of its 13F portfolio. Sitting at the No. 2 spot is D E Shaw, holding a $0.3 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions contain Israel Englander’s Millennium Management, Cliff Asness’ AQR Capital Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually got rid of their positions entirely. Intriguingly, Benjamin A. Smith’s Laurion Capital Management got rid of the biggest position of all the investors monitored by Insider Monkey, valued at about $0.2 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund cut about $0.1 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks similar to Peregrine Pharmaceuticals (NASDAQ:PPHM). These stocks are KLR Energy Acquisition Corp (NASDAQ:KLRE), PRGX Global Inc (NASDAQ:PRGX), pSivida Corp. (NASDAQ:PSDV), and TESSCO Technologies, Inc. (NASDAQ:TESS). This group of stocks’ market valuations resemble PPHM’s market valuation.

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $2 million in PPHM’s case. PRGX Global Inc (NASDAQ:PRGX) is the most popular stock in this table. On the other hand TESSCO Technologies, Inc. (NASDAQ:TESS) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Peregrine Pharmaceuticals (NASDAQ:PPHM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None