Michael Castor’s Sio Capital Management has recently disclosed an increase in its exposure to Adamis Pharmaceuticals Corp (NASDAQ:ADMP). The fund declared ownership of 1.06 million shares as of October 15, while in its most recent 13G filing, it acknowledged holding 1.16 million shares of Common Stock, which account for 11.07% of the company’s shares outstanding.
Michael Castor is amongst the three best hedge fund managers of 2013, along with David Tepper of Appaloosa Management and Larry Robbins of Glenview Capital, even though his equity portfolio is relatively small – in terms of market value. As stated in a previous article, Mr. Castor used to be a surgeon, but switched to finance in mid-2000s. He served as a health-care analyst at JPMorgan and Bernstein Investment Research and Management, before launching Sio Capital, a New York-based hedge fund, in 2006.
Castor managed to outperform the market by 6.6 percentage points with a nearly market neutral portfolio (Sio Capital’s beta was 0.15 since inception). Sio Capital was also 12% net short in 2012, yet it returned 14.9% after fees and expenses. Check out some of Mr. Castor’s top picks.
Now, back to the move that interests us in this occasion. Adamis Pharmaceuticals Corp (NASDAQ:ADMP) is a $50.21 million market cap biopharmaceutical company engaged in the development and commercialization of specialty pharmaceutical and biotechnology products in the therapeutic areas of respiratory disease, allergy, oncology and immunology. The company recently reported its third quarter results, with no revenues, but several institutional investors are still betting on the potential of its pipeline.
Other major funds that seem quite bullish on Adamis Pharmaceuticals Corp (NASDAQ:ADMP) are Carl Wiese’s Grow Partners, which disclosed ownership of 380,600 shares by the end of the third quarter, and Paul Marshall and Ian Wace’s Marshall Wace LLP, which started a position, with 71,359 shares, over the third quarter.
But, why follow Michael Castor into this not-yet-profitable company? Well, Mr. Castor’s picks, especially those in the healthcare sector, have performed amazingly in the past. In fact, he shared some ideas with us, and most of them outpaced the market by a wide margin.
In late February 2013, he recommended Cardinal Health Inc (NYSE:CAH), which went up more than 60% since, NPS Pharmaceuticals, Inc. (NASDAQ:NPS), which returned about 250%, and Anacor Pharmaceuticals Inc (NASDAQ:ANAC), which jumped from $3.27 per share at the time of the recommendation to more than $35 per share, as of Friday December 5.