Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Chimerix Inc (NASDAQ:CMRX) was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. CMRX investors should pay attention to a decrease in enthusiasm from smart money recently. There were 21 hedge funds in our database with CMRX holdings at the end of the previous quarter. At the end of this article we will also compare CMRX to other stocks including Tahoe Resources Inc (NYSE:TAHO), The St. Joe Company (NYSE:JOE), and Ferrellgas Partners, L.P. (NYSE:FGP) to get a better sense of its popularity.
Now, we’re going to take a glance at the key action encompassing Chimerix Inc (NASDAQ:CMRX).
Hedge fund activity in Chimerix Inc (NASDAQ:CMRX)
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Redmile Group, managed by Jeremy Green, holds the most valuable position in Chimerix Inc (NASDAQ:CMRX). Redmile Group has a $40.8 million position in the stock, comprising 0.9% of its 13F portfolio. Coming in second is Samuel Isaly of OrbiMed Advisors, with a $39 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions comprise Dennis Purcell’s Aisling Capital, Ken Griffin’s Citadel Investment Group and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.
Judging by the fact that Chimerix Inc (NASDAQ:CMRX) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of hedge funds that slashed their full holdings last quarter. Interestingly, Benjamin A. Smith’s Laurion Capital Management said goodbye to the largest investment of all the hedgies followed by Insider Monkey, comprising close to $4.2 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also said goodbye to its stock, about $4.2 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 4 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Chimerix Inc (NASDAQ:CMRX) but similarly valued. These stocks are Tahoe Resources Inc (NYSE:TAHO), The St. Joe Company (NYSE:JOE), Ferrellgas Partners, L.P. (NYSE:FGP), and Mellanox Technologies, Ltd. (NASDAQ:MLNX). This group of stocks’ market values resemble CMRX’s market value.
|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 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $248 million. That figure was $207 million in CMRX’s case. Mellanox Technologies, Ltd. (NASDAQ:MLNX) is the most popular stock in this table. On the other hand Ferrellgas Partners, L.P. (NYSE:FGP) is the least popular one with only 4 bullish hedge fund positions. Chimerix Inc (NASDAQ:CMRX) 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. In this regard MLNX might be a better candidate to consider a long position.