Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Osiris Therapeutics, Inc. (NASDAQ:OSIR) investors should pay attention to a decrease in hedge fund sentiment of late, with the number of bullish bets on the stock falling by one. At the end of this article we will also compare Osiris Therapeutics, Inc. (NASDAQ:OSIR) to other stocks including Blackstone / GSO Strategic Credit Fund (NYSE:BGB), Foundation Medicine Inc (NASDAQ:FMI), and Quidel Corporation (NASDAQ:QDEL) to get a better sense of its popularity.
According to most investors, hedge funds are perceived as worthless, old investment tools of yesteryear. While there are more than 8,000 funds in operation today, experts at hedge fund tracking site Insider Monkey look at the bigwigs of this group, around 700 funds. Most estimates calculate that this group of people oversee the lion’s share of the hedge fund industry’s total asset base, and by shadowing their best stock picks, Insider Monkey has revealed numerous investment strategies that have historically outperformed Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in its back tests.
Now, we’re going to take a gander at the key action regarding Osiris Therapeutics, Inc. (NASDAQ:OSIR).
What have hedge funds been doing with Osiris Therapeutics, Inc. (NASDAQ:OSIR)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 9% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.
According to Insider Monkey’s hedge fund database, Mitchell Blutt’s Consonance Capital Management has the biggest position in Osiris Therapeutics, Inc. (NASDAQ:OSIR), worth close to $37.6 million, corresponding to 5.3% of its total 13F portfolio. The second-largest stake is held by Baker Bros. Advisors, led by Julian Baker and Felix Baker, holding a $9.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism contain Jim Simons’ Renaissance Technologies, Jeffrey Jay and David Kroin’s Great Point Partners, and D E Shaw.
Since Osiris Therapeutics, Inc. (NASDAQ:OSIR) has experienced declining sentiment from the smart money, logic holds that there lies a certain “tier” of money managers that slashed their entire stakes by the end of the third quarter. At the top of the heap, Brandon Osten’s Venator Capital Management cut the biggest investment of all the hedgies followed by Insider Monkey, totaling an estimated $4.2 million in stock, while Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital were right behind this move, dropping about $0.9 million worth of shares. These moves are intriguing to say the least, as total hedge fund interest fell by one fund at the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Osiris Therapeutics, Inc. (NASDAQ:OSIR). These stocks are Blackstone / GSO Strategic Credit Fund (NYSE:BGB), Foundation Medicine Inc (NASDAQ:FMI), Quidel Corporation (NASDAQ:QDEL), and Raven Industries, Inc. (NASDAQ:RAVN). This group of stocks’ market valuations match Osiris Therapeutics, Inc. (NASDAQ:OSIR)’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of nine hedge funds with bullish positions and the average amount invested in these stocks was $43 million. Investments in Osiris were higher, with money managers that we track owning $53 million worth of its shares and 8.30% of its stock. Quidel Corporation (NASDAQ:QDEL) is the most popular stock in this table. On the other hand Blackstone / GSO Strategic Credit Fund (NYSE:BGB) is the least popular one with only seven bullish hedge fund positions. Osiris Therapeutics, Inc. (NASDAQ:OSIR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Given the declining interest in Osiris, it is not one of those stocks at this time.