Does CEL-SCI Corporation (CVM) Represent a Good Investment?

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We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Sabby Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was “Park West Asset Management).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CEL-SCI Corporation (:CVM) but similarly valued. We will take a look at AdCare Health Systems, Inc. (NYSEMKT:ADK), Gulf Coast Ultra Deep Royalty Trust (OTCMKTS:GULTU), Ballantyne Strong Inc (NYSEAMEX:BTN), and OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI). This group of stocks’ market values are similar to CVM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADK 5 3606 1
GULTU 14 21142 -4
BTN 4 16596 0
OGXI 5 2715 -2

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. Gulf Coast Ultra Deep Royalty Trust (OTCMKTS:GULTU) is the most popular stock in this table, while Ballantyne Strong Inc (NYSEAMEX:BTN) is the least popular one. Compared to these stocks CEL-SCI Corporation (NYSEAMEX:CVM) is even less popular than BTN. Moreover, hedge funds held just $1.0 million worth of CVM’s shares at the end of September. Therefore, it seems that smart money is not very fond of CVM, which does not necessarily mean that the stock is overvalued and a further analysis might still suggest that the stock is worth buying. However, we think it may be better to look into stocks that hedge funds are collectively most bullish on.

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