Hedge Funds Are Piling Into Fennec Pharmaceuticals Inc. (FENC)

In this article you are going to find out whether hedge funds think Fennec Pharmaceuticals Inc. (NASDAQ:FENC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is Fennec Pharmaceuticals Inc. (NASDAQ:FENC) a sound stock to buy now? Investors who are in the know were in an optimistic mood. The number of long hedge fund positions moved up by 4 recently. Fennec Pharmaceuticals Inc. (NASDAQ:FENC) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 9. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FENC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

According to most market participants, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are more than 8000 funds trading today, We look at the bigwigs of this group, approximately 850 funds. These hedge fund managers handle the majority of the smart money’s total asset base, and by tracking their finest stock picks, Insider Monkey has discovered numerous investment strategies that have historically defeated the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .

With all of this in mind let’s take a look at the new hedge fund action regarding Fennec Pharmaceuticals Inc. (NASDAQ:FENC).

Do Hedge Funds Think FENC Is A Good Stock To Buy Now?

At Q2’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FENC over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Fennec Pharmaceuticals Inc. (NASDAQ:FENC) was held by Southpoint Capital Advisors, which reported holding $29.7 million worth of stock at the end of June. It was followed by Sonic Capital with a $17.7 million position. Other investors bullish on the company included Avoro Capital Advisors (venBio Select Advisor), 683 Capital Partners, and Solas Capital Management. In terms of the portfolio weights assigned to each position Sonic Capital allocated the biggest weight to Fennec Pharmaceuticals Inc. (NASDAQ:FENC), around 8.09% of its 13F portfolio. Solas Capital Management is also relatively very bullish on the stock, dishing out 4.44 percent of its 13F equity portfolio to FENC.

As industrywide interest jumped, key hedge funds have jumped into Fennec Pharmaceuticals Inc. (NASDAQ:FENC) headfirst. DG Capital Management, managed by Dov Gertzulin, created the most valuable position in Fennec Pharmaceuticals Inc. (NASDAQ:FENC). DG Capital Management had $4.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $3 million investment in the stock during the quarter. The following funds were also among the new FENC investors: Raymond J. Harbert’s Harbert Management, Renaissance Technologies, and Michael Gelband’s ExodusPoint Capital.

Let’s check out hedge fund activity in other stocks similar to Fennec Pharmaceuticals Inc. (NASDAQ:FENC). We will take a look at Innodata Inc (NASDAQ:INOD), Hycroft Mining Holding Corporation (NASDAQ:HYMC), AudioEye, Inc. (NASDAQ:AEYE), Five Star Senior Living Inc. (NASDAQ:FVE), Biofrontera AG (NASDAQ:BFRA), LSB Industries, Inc. (NYSE:LXU), and Overseas Shipholding Group, Inc. (NYSE:OSG). This group of stocks’ market valuations resemble FENC’s market valuation.

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As you can see these stocks had an average of 8.6 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $82 million in FENC’s case. Hycroft Mining Holding Corporation (NASDAQ:HYMC) is the most popular stock in this table. On the other hand Biofrontera AG (NASDAQ:BFRA) is the least popular one with only 1 bullish hedge fund positions. Fennec Pharmaceuticals Inc. (NASDAQ:FENC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FENC is 71.1. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on FENC as the stock returned 28.3% since the end of Q2 (through 9/27) 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.