Hedge Funds Have Never Been This Bullish On Agile Therapeutics Inc (AGRX)

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Agile Therapeutics Inc (NASDAQ:AGRX) based on that data.

Agile Therapeutics Inc (NASDAQ:AGRX) was in 15 hedge funds’ portfolios at the end of March. AGRX investors should be aware of an increase in activity from the world’s largest hedge funds lately. There were 12 hedge funds in our database with AGRX holdings at the end of the previous quarter. Our calculations also showed that AGRX 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Kamran Moghtaderi of Eversept Partners

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the 10 best imported beer in 2020 to identify emerging trends that are likely to lead to 1000% gains in the coming years. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a glance at the latest hedge fund action surrounding Agile Therapeutics Inc (NASDAQ:AGRX).

How are hedge funds trading Agile Therapeutics Inc (NASDAQ:AGRX)?

At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards AGRX over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Joseph Edelman’s Perceptive Advisors has the biggest position in Agile Therapeutics Inc (NASDAQ:AGRX), worth close to $29.6 million, comprising 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $2.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish encompass Samuel Isaly’s OrbiMed Advisors, Renaissance Technologies and Kamran Moghtaderi’s Eversept Partners. In terms of the portfolio weights assigned to each position Perceptive Advisors allocated the biggest weight to Agile Therapeutics Inc (NASDAQ:AGRX), around 0.77% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, earmarking 0.68 percent of its 13F equity portfolio to AGRX.

As one would reasonably expect, some big names were breaking ground themselves. OrbiMed Advisors, managed by Samuel Isaly, initiated the most valuable position in Agile Therapeutics Inc (NASDAQ:AGRX). OrbiMed Advisors had $2.2 million invested in the company at the end of the quarter. Dov Gertzulin’s DG Capital Management also made a $0.4 million investment in the stock during the quarter. The following funds were also among the new AGRX investors: Benjamin A. Smith’s Laurion Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ken Griffin’s Citadel Investment Group.

Let’s go over hedge fund activity in other stocks similar to Agile Therapeutics Inc (NASDAQ:AGRX). These stocks are Clearfield, Inc. (NASDAQ:CLFD), GSI Technology, Inc. (NASDAQ:GSIT), X4 Pharmaceuticals, Inc. (NASDAQ:XFOR), and CIM Commercial Trust Corporation (NASDAQ:CMCT). This group of stocks’ market values resemble AGRX’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CLFD 3 8200 -1
GSIT 6 14193 1
XFOR 9 43341 -3
CMCT 5 11637 -2
Average 5.75 19343 -1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $39 million in AGRX’s case. X4 Pharmaceuticals, Inc. (NASDAQ:XFOR) is the most popular stock in this table. On the other hand Clearfield, Inc. (NASDAQ:CLFD) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Agile Therapeutics Inc (NASDAQ:AGRX) 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 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on AGRX as the stock returned 60.2% so far in Q2 (through June 25th) 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.