Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns, rather than following the ups and downs of equity markets, hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Catalyst Biosciences Inc (NASDAQ:CBIO).
Is Catalyst Biosciences Inc (NASDAQ:CBIO) a buy, sell, or hold? The smart money is buying. The number of long hedge fund bets went up by 9 recently. Catalyst Biosciences Inc (NASDAQ:CBIO) was in 9 hedge funds’ portfolios at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Bovie Medical Corporation (NYSEMKT:BVX), A M Castle and Co (NYSE:CAS), and BIOLASE Inc (NASDAQ:BIOL) to gather more data points.
At the moment there are a multitude of indicators stock traders employ to evaluate publicly traded companies. A pair of the most under-the-radar indicators are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the best investment managers can outpace the market by a very impressive amount (see the details here).
Now, let’s take a glance at the fresh action regarding Catalyst Biosciences Inc (NASDAQ:CBIO).
Hedge fund activity in Catalyst Biosciences Inc (NASDAQ:CBIO)
At the end of the third quarter, 9 elite funds reported a long position in this biotech company, whereas none were holding this stock at the end of the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Mark Lampert’s Biotechnology Value Fund / BVF Inc has the largest position in Catalyst Biosciences Inc (NASDAQ:CBIO), worth close to $4.8 million, corresponding to 1% of its total 13F portfolio. Sitting at the No. 2 spot is Dov Gertzulin of DG Capital Management, with a $1.2 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism consist of Stephen DuBois’s Camber Capital Management, D. E. Shaw’s D E Shaw and Alex Denner’s Sarissa Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Catalyst Biosciences Inc (NASDAQ:CBIO) but similarly valued. These stocks are Bovie Medical Corporation (NYSEMKT:BVX), A M Castle and Co (NYSE:CAS), BIOLASE Inc (NASDAQ:BIOL), and FX Energy, Inc. (NASDAQ:FXEN). This group of stocks’ market values resemble CBIO’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 7 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure in the case of CBIO was $9 million as well. BIOLASE Inc (NASDAQ:BIOL) is the most popular stock in this table, while FX Energy, Inc. (NASDAQ:FXEN) is the least popular one with only 5 bullish hedge fund positions. With 9 elite funds having reported long positions, Catalyst Biosciences Inc (NASDAQ:CBIO) is clearly the most popular stock among its peers. Taking into consideration all these factors, it may be a good idea to analyze this stock in detail and potentially include it in your portfolio.