Did Hedge Funds Drop The Ball On TherapeuticsMD Inc (TXMD) ?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 730 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 28th, 2019. What do these smart investors think about TherapeuticsMD Inc (NASDAQ:TXMD)?

Is TherapeuticsMD Inc (NASDAQ:TXMD) the right investment to pursue these days? The best stock pickers are getting less optimistic. The number of long hedge fund bets shrunk by 1 lately. Our calculations also showed that TXMD isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In today’s marketplace there are numerous indicators stock market investors employ to grade stocks. A pair of the best indicators are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can trounce their index-focused peers by a very impressive amount (see the details here).

Clint Carlson, Carlson Capital

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a peek at the fresh hedge fund action regarding TherapeuticsMD Inc (NASDAQ:TXMD).

How have hedgies been trading TherapeuticsMD Inc (NASDAQ:TXMD)?

At Q2’s end, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TXMD over the last 16 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with TXMD Positions

Among these funds, Rubric Capital Management held the most valuable stake in TherapeuticsMD Inc (NASDAQ:TXMD), which was worth $17.5 million at the end of the second quarter. On the second spot was Carlson Capital which amassed $2 million worth of shares. Moreover, Citadel Investment Group, Millennium Management, and OZ Management were also bullish on TherapeuticsMD Inc (NASDAQ:TXMD), allocating a large percentage of their portfolios to this stock.

Since TherapeuticsMD Inc (NASDAQ:TXMD) has faced declining sentiment from the smart money, we can see that there lies a certain “tier” of funds who sold off their full holdings last quarter. It’s worth mentioning that Mariko Gordon’s Daruma Asset Management dumped the biggest position of all the hedgies monitored by Insider Monkey, worth close to $34.6 million in stock. D. E. Shaw’s fund, D E Shaw, also dumped its stock, about $1.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to TherapeuticsMD Inc (NASDAQ:TXMD). We will take a look at HarborOne Bancorp, Inc. (NASDAQ:HONE), MYR Group Inc (NASDAQ:MYRG), First Foundation Inc (NASDAQ:FFWM), and Movado Group, Inc (NYSE:MOV). All of these stocks’ market caps match TXMD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HONE 4 11384 0
MYRG 11 25997 -4
FFWM 10 77057 -1
MOV 20 42693 -3
Average 11.25 39283 -2

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $21 million in TXMD’s case. Movado Group, Inc (NYSE:MOV) is the most popular stock in this table. On the other hand HarborOne Bancorp, Inc. (NASDAQ:HONE) is the least popular one with only 4 bullish hedge fund positions. TherapeuticsMD Inc (NASDAQ:TXMD) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on TXMD as the stock returned 39.6% during the same time frame and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.