After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Motif Bio plc (NASDAQ:MTFB).
Motif Bio plc (NASDAQ:MTFB) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of September. At the end of this article we will also compare MTFB to other stocks including Trans World Entertainment Corporation (NASDAQ:TWMC), Aethlon Medical, Inc. (NASDAQ:AEMD), and Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) to get a better sense of its popularity.
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 has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s review the new hedge fund action surrounding Motif Bio plc (NASDAQ:MTFB).
How are hedge funds trading Motif Bio plc (NASDAQ:MTFB)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards MTFB over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Motif Bio plc (NASDAQ:MTFB), with a stake worth $0 million reported as of the end of September. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $0 million. Sand Grove Capital Partners was 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 Sand Grove Capital Partners allocated the biggest weight to Motif Bio plc (NASDAQ:MTFB), around 0.0004% of its portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0 percent of its 13F equity portfolio to MTFB.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Motif Bio plc (NASDAQ:MTFB) but similarly valued. These stocks are Trans World Entertainment Corporation (NASDAQ:TWMC), Aethlon Medical, Inc. (NASDAQ:AEMD), Invivo Therapeutics Holdings Corp (NASDAQ:NVIV), and Technical Communications Corporation (NASDAQ:TCCO). This group of stocks’ market values match MTFB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TWMC | 1 | 206 | 0 |
| AEMD | 1 | 2 | 0 |
| NVIV | 1 | 241 | -1 |
| TCCO | 1 | 86 | 0 |
| Average | 1 | 134 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1 hedge funds with bullish positions and the average amount invested in these stocks was $0 million. That figure was $0 million in MTFB’s case. Trans World Entertainment Corporation (NASDAQ:TWMC) is the most popular stock in this table. On the other hand Trans World Entertainment Corporation (NASDAQ:TWMC) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Motif Bio plc (NASDAQ:MTFB) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately MTFB wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MTFB were disappointed as the stock returned -59.4% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
