The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards SIGA Technologies Inc. (NASDAQ:SIGA).
Is SIGA Technologies Inc. (NASDAQ:SIGA) a sound investment right now? The smart money is taking a bullish view. The number of long hedge fund positions improved by 6 lately. Our calculations also showed that siga isn’t among the 30 most popular stocks among hedge funds. SIGA was in 16 hedge funds’ portfolios at the end of March. There were 10 hedge funds in our database with SIGA positions at the end of the previous quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 market by 40 percentage points since May 2014 through May 30, 2019 (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. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s go over the recent hedge fund action surrounding SIGA Technologies Inc. (NASDAQ:SIGA).
How are hedge funds trading SIGA Technologies Inc. (NASDAQ:SIGA)?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 60% from the fourth quarter of 2018. On the other hand, there were a total of 6 hedge funds with a bullish position in SIGA a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Jet Capital Investors held the most valuable stake in SIGA Technologies Inc. (NASDAQ:SIGA), which was worth $15.5 million at the end of the first quarter. On the second spot was Nantahala Capital Management which amassed $10.8 million worth of shares. Moreover, Oaktree Capital Management, Renaissance Technologies, and Marshall Wace LLP were also bullish on SIGA Technologies Inc. (NASDAQ:SIGA), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, specific money managers have jumped into SIGA Technologies Inc. (NASDAQ:SIGA) headfirst. Oaktree Capital Management, managed by Howard Marks, established the biggest position in SIGA Technologies Inc. (NASDAQ:SIGA). Oaktree Capital Management had $1 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $0.6 million investment in the stock during the quarter. The following funds were also among the new SIGA investors: Jeffrey Talpins’s Element Capital Management, Roger Ibbotson’s Zebra Capital Management, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s now take a look at hedge fund activity in other stocks similar to SIGA Technologies Inc. (NASDAQ:SIGA). These stocks are CytomX Therapeutics, Inc. (NASDAQ:CTMX), Prothena Corporation plc (NASDAQ:PRTA), Phunware, Inc. (NASDAQ:PHUN), and Replimune Group, Inc. (NASDAQ:REPL). This group of stocks’ market caps resemble SIGA’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $30 million in SIGA’s case. Prothena Corporation plc (NASDAQ:PRTA) is the most popular stock in this table. On the other hand Replimune Group, Inc. (NASDAQ:REPL) is the least popular one with only 5 bullish hedge fund positions. SIGA Technologies Inc. (NASDAQ:SIGA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SIGA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SIGA were disappointed as the stock returned -10.5% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.