Bioline RX Ltd (NASDAQ:BLRX) shares are up another 17% today, bringing its cumualtive return to above 30% over the past week. JP Morgan initiated coverage and set a $5 price target earlier this week. “BioLine RX is advancing an arsenal of products in development with the hope of delivering important new therapies to treat a wide variety of diseases. …investors are undervaluing the pipeline potential of BLRX, considering that four of its six clinical assets are in Phase II trials or have efficacy validity data, with estimated worldwide sales potential of over $3.7bn,” JP Morgan said.
Is Bioline RX a buy right now? When it comes to biotech stocks and their potential we rely on hedge fund sentiment to answer this question. Money managers are turning bullish on Bioline RX. The number of bullish hedge fund positions moved up by 2 lately.BLRX was in 8 hedge funds’ portfolio at the end of March. There were 6 hedge funds in our database with BLRX positions at the end of the previous quarter.
We pay attention to hedge funds’ moves because our research have shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. however, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks returned 142% since then and outperformed the S&P 500 Index by 84 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
What have hedge funds been doing with Bioline RX Ltd (NASDAQ:BLRX)?
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the fourth quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who held large stakes in BLRX.
Rima Senvest Management, managed by Richard Mashaal, holds the most valuable position in Bioline RX Ltd (NASDAQ:BLRX). Rima Senvest Management has a $7 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Broadfin Capital, managed by Kevin Kotler, which held a $6.5 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other peers that are bullish comprise Mark Lampert’s Biotechnology Value Fund, Samuel Isaly’s OrbiMed Advisors and Anand Parekh’s Alyeska Investment Group.
Now, key money managers were breaking ground themselves. Broadfin Capital initiated the biggest position in Bioline RX Ltd (NASDAQ:BLRX). Broadfin Capital had $6.5 million invested in the company at the end of the quarter. Broadfin owned 6% of the company’s outstanding shares. Anand Parekh’s Alyeska Investment Group also initiated a $1.6 million position during the quarter. The only other fund with a brand new BLRX position is Israel Englander’s Millennium Management.
Eight hedge fund owning more than 20% of a $100 million speculative biotech stock’s shares is a huge sign of confidence. Investing in stocks with similar characteristics historically delivered market beating returns. That’s why we believe Bioline RX is a buy right now.