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Hedge Funds Have Never Been This Bullish On TG Therapeutics Inc (TGTX)

In this article we will check out the progression of hedge fund sentiment towards TG Therapeutics Inc (NASDAQ:TGTX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

TG Therapeutics Inc (NASDAQ:TGTX) investors should be aware of an increase in hedge fund sentiment in recent months. TGTX was in 26 hedge funds’ portfolios at the end of March. There were 22 hedge funds in our database with TGTX holdings at the end of the previous quarter. Our calculations also showed that TGTX 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.

Nathaniel August - Mangrove Partners

Nathaniel August of Mangrove Partners

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. With all of this in mind we’re going to take a look at the fresh hedge fund action encompassing TG Therapeutics Inc (NASDAQ:TGTX).

What have hedge funds been doing with TG Therapeutics Inc (NASDAQ:TGTX)?

Heading into the second quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in TGTX 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.

Of the funds tracked by Insider Monkey, Peter Kolchinsky’s RA Capital Management has the number one position in TG Therapeutics Inc (NASDAQ:TGTX), worth close to $102.2 million, corresponding to 3.2% of its total 13F portfolio. On RA Capital Management’s heels is Jeffrey Jay and David Kroin of Great Point Partners, with a $25.2 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Some other peers with similar optimism contain Kamran Moghtaderi’s Eversept Partners, Ken Griffin’s Citadel Investment Group and Panayotis Takis Sparaggis’s Alkeon Capital Management. In terms of the portfolio weights assigned to each position Eversept Partners allocated the biggest weight to TG Therapeutics Inc (NASDAQ:TGTX), around 6.13% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, designating 3.23 percent of its 13F equity portfolio to TGTX.

Now, key hedge funds were leading the bulls’ herd. Mangrove Partners, managed by Nathaniel August, assembled the most outsized position in TG Therapeutics Inc (NASDAQ:TGTX). Mangrove Partners had $12.2 million invested in the company at the end of the quarter. Arsani William’s Logos Capital also made a $2.5 million investment in the stock during the quarter. The following funds were also among the new TGTX investors: Dmitry Balyasny’s Balyasny Asset Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TG Therapeutics Inc (NASDAQ:TGTX) but similarly valued. These stocks are Plug Power, Inc. (NASDAQ:PLUG), New Frontier Health Corporation (NYSE:NFH), Inovio Pharmaceuticals Inc (NASDAQ:INO), and Urban Edge Properties (NYSE:UE). All of these stocks’ market caps resemble TGTX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PLUG 15 92142 2
NFH 16 172547 4
INO 8 22544 3
UE 21 68712 2
Average 15 88986 2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $260 million in TGTX’s case. Urban Edge Properties (NYSE:UE) is the most popular stock in this table. On the other hand Inovio Pharmaceuticals Inc (NASDAQ:INO) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks TG Therapeutics Inc (NASDAQ:TGTX) 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 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on TGTX as the stock returned 89.5% so far in Q2 (through the end of May) 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.