In this article we will take a look at whether hedge funds think Tantech Holdings Ltd. (NASDAQ:TANH) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Tantech Holdings Ltd. (NASDAQ:TANH) undervalued? The best stock pickers were taking an optimistic view. The number of bullish hedge fund positions increased by 1 recently. Tantech Holdings Ltd. (NASDAQ:TANH) was in 3 hedge funds’ portfolios at the end of September. The all time high for this statistics is 4. Our calculations also showed that TANH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s go over the fresh hedge fund action regarding Tantech Holdings Ltd. (NASDAQ:TANH).
What does smart money think about Tantech Holdings Ltd. (NASDAQ:TANH)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TANH over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the biggest position in Tantech Holdings Ltd. (NASDAQ:TANH), worth close to $1 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $0 million position; less than 0.1%% of its 13F portfolio is allocated to the company. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Tantech Holdings Ltd. (NASDAQ:TANH), around 0.001% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0 percent of its 13F equity portfolio to TANH.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the most valuable position in Tantech Holdings Ltd. (NASDAQ:TANH). Millennium Management had $0 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks similar to Tantech Holdings Ltd. (NASDAQ:TANH). These stocks are Clearside Biomedical, Inc. (NASDAQ:CLSD), Adamis Pharmaceuticals Corporation (NASDAQ:ADMP), Assertio Holdings, Inc. (NASDAQ:ASRT), Navidea Biopharmaceuticals Inc (NYSE:NAVB), Rhinebeck Bancorp, Inc. (NASDAQ:RBKB), Oncolytics Biotech, Inc. (NASDAQ:ONCY), and United Bancshares Inc. (NASDAQ:UBOH). This group of stocks’ market caps are closest to TANH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLSD | 3 | 1921 | 0 |
| ADMP | 1 | 16 | -1 |
| ASRT | 13 | 14432 | -5 |
| NAVB | 3 | 443 | 1 |
| RBKB | 2 | 4432 | 0 |
| ONCY | 3 | 266 | 1 |
| UBOH | 1 | 6293 | 0 |
| Average | 3.7 | 3972 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.7 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $1 million in TANH’s case. Assertio Holdings, Inc. (NASDAQ:ASRT) is the most popular stock in this table. On the other hand Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) is the least popular one with only 1 bullish hedge fund positions. Tantech Holdings Ltd. (NASDAQ:TANH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TANH is 36.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately TANH wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TANH investors were disappointed as the stock returned -14.1% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.