A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Obalon Therapeutics, Inc. (NASDAQ:OBLN).
Is Obalon Therapeutics, Inc. (NASDAQ:OBLN) a buy right now? The smart money was taking an optimistic view. The number of bullish hedge fund positions increased by 1 recently. Obalon Therapeutics, Inc. (NASDAQ:OBLN) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 5. Our calculations also showed that OBLN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 2 hedge funds in our database with OBLN holdings at the end of December.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to check out the recent hedge fund action regarding Obalon Therapeutics, Inc. (NASDAQ:OBLN).
Do Hedge Funds Think OBLN Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in OBLN a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Armistice Capital, managed by Steven Boyd, holds the biggest position in Obalon Therapeutics, Inc. (NASDAQ:OBLN). Armistice Capital has a $3.1 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. In terms of the portfolio weights assigned to each position Armistice Capital allocated the biggest weight to Obalon Therapeutics, Inc. (NASDAQ:OBLN), around 0.07% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0002 percent of its 13F equity portfolio to OBLN.
Now, specific money managers were leading the bulls’ herd. Renaissance Technologies, assembled the most valuable position in Obalon Therapeutics, Inc. (NASDAQ:OBLN). Renaissance Technologies had $0.2 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks similar to Obalon Therapeutics, Inc. (NASDAQ:OBLN). We will take a look at Forward Industries, Inc. (NASDAQ:FORD), Coffee Holding Co., Inc. (NASDAQ:JVA), Performance Shipping Inc. (NASDAQ:PSHG), Tenax Therapeutics Inc (NASDAQ:TENX), Unico American Corporation (NASDAQ:UNAM), Summer Infant, Inc. (NASDAQ:SUMR), and AmpliTech Group, Inc. (NASDAQ:AMPG). All of these stocks’ market caps are closest to OBLN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FORD | 2 | 2618 | 1 |
| JVA | 2 | 3908 | 0 |
| PSHG | 3 | 1054 | 2 |
| TENX | 3 | 5289 | -1 |
| UNAM | 1 | 126 | 0 |
| SUMR | 3 | 12015 | 0 |
| AMPG | 2 | 1591 | 2 |
| Average | 2.3 | 3800 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.3 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $3 million in OBLN’s case. Performance Shipping Inc. (NASDAQ:PSHG) is the most popular stock in this table. On the other hand Unico American Corporation (NASDAQ:UNAM) is the least popular one with only 1 bullish hedge fund positions. Obalon Therapeutics, Inc. (NASDAQ:OBLN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OBLN is 74. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Hedge funds were also right about betting on OBLN as the stock returned 16% since the end of Q1 (through 6/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
