The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about DiaMedica Therapeutics Inc. (NASDAQ:DMAC)?
DiaMedica Therapeutics Inc. (NASDAQ:DMAC) investors should pay attention to an increase in hedge fund sentiment recently. Our calculations also showed that DMAC isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
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. 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 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Timothy P. Lynch of Stonepine Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to analyze the latest hedge fund action regarding DiaMedica Therapeutics Inc. (NASDAQ:DMAC).
What does smart money think about DiaMedica Therapeutics Inc. (NASDAQ:DMAC)?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DMAC over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Stonepine Capital was the largest shareholder of DiaMedica Therapeutics Inc. (NASDAQ:DMAC), with a stake worth $2.3 million reported as of the end of September. Trailing Stonepine Capital was Nantahala Capital Management, which amassed a stake valued at $2.1 million. Granite Point Capital, Manatuck Hill Partners, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Stonepine Capital allocated the biggest weight to DiaMedica Therapeutics Inc. (NASDAQ:DMAC), around 2.44% of its 13F portfolio. Manatuck Hill Partners is also relatively very bullish on the stock, setting aside 0.9 percent of its 13F equity portfolio to DMAC.
Consequently, key hedge funds have jumped into DiaMedica Therapeutics Inc. (NASDAQ:DMAC) headfirst. Stonepine Capital, managed by Timothy P. Lynch, created the largest position in DiaMedica Therapeutics Inc. (NASDAQ:DMAC). Stonepine Capital had $2.3 million invested in the company at the end of the quarter. Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management also initiated a $2.1 million position during the quarter. The only other fund with a new position in the stock is Renaissance Technologies.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as DiaMedica Therapeutics Inc. (NASDAQ:DMAC) but similarly valued. We will take a look at Acasti Pharma Inc. (NASDAQ:ACST), Global Self Storage, Inc. (NASDAQ:SELF), Anixa Biosciences, Inc. (NASDAQ:ANIX), and Virco Mfg. Corporation (NASDAQ:VIRC). All of these stocks’ market caps are similar to DMAC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACST | 3 | 213 | -4 |
| SELF | 1 | 68 | 0 |
| ANIX | 1 | 51 | 1 |
| VIRC | 2 | 2410 | 0 |
| Average | 1.75 | 686 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.75 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $7 million in DMAC’s case. Acasti Pharma Inc. (NASDAQ:ACST) is the most popular stock in this table. On the other hand Global Self Storage, Inc. (NASDAQ:SELF) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on DMAC as the stock returned 65% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
