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Hedge Funds Still Very Bullish On Catalyst Biosciences Inc (CBIO)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Catalyst Biosciences Inc (NASDAQ:CBIO) based on that data and determine whether they were really smart about the stock.

Catalyst Biosciences Inc (NASDAQ:CBIO) was in 12 hedge funds’ portfolios at the end of the first quarter of 2020. CBIO shareholders have witnessed a decrease in hedge fund sentiment lately. There were 15 hedge funds in our database with CBIO holdings at the end of the previous quarter. Our calculations also showed that CBIO 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.

If you’d ask most stock holders, hedge funds are perceived as unimportant, old investment vehicles of years past. While there are over 8000 funds trading at the moment, Our experts hone in on the masters of this group, about 850 funds. These hedge fund managers direct the majority of the smart money’s total capital, and by keeping an eye on their first-class picks, Insider Monkey has uncovered numerous investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Tim Lynch of Stonepine Capital

Tim Lynch of Stonepine Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. 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 we’re going to go over the new hedge fund action encompassing Catalyst Biosciences Inc (NASDAQ:CBIO).

How are hedge funds trading Catalyst Biosciences Inc (NASDAQ:CBIO)?

At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CBIO over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Among these funds, Nantahala Capital Management held the most valuable stake in Catalyst Biosciences Inc (NASDAQ:CBIO), which was worth $6.3 million at the end of the third quarter. On the second spot was Acuta Capital Partners which amassed $6.1 million worth of shares. Millennium Management, Stonepine Capital, and Citadel Investment Group 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 Catalyst Biosciences Inc (NASDAQ:CBIO), around 4.71% of its 13F portfolio. Acuta Capital Partners is also relatively very bullish on the stock, setting aside 2.93 percent of its 13F equity portfolio to CBIO.

Seeing as Catalyst Biosciences Inc (NASDAQ:CBIO) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedge funds who were dropping their full holdings last quarter. At the top of the heap, Nathaniel August’s Mangrove Partners dropped the largest position of the 750 funds followed by Insider Monkey, totaling close to $4.6 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also said goodbye to its stock, about $0.9 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Catalyst Biosciences Inc (NASDAQ:CBIO). These stocks are Gulfport Energy Corporation (NASDAQ:GPOR), Navios Maritime Acquisition Corp (NYSE:NNA), Protalix BioTherapeutics Inc. (NYSE:PLX), and SCYNEXIS Inc (NASDAQ:SCYX). All of these stocks’ market caps are closest to CBIO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GPOR 9 15568 -6
NNA 4 1726 -2
PLX 2 12470 1
SCYX 4 2543 -3
Average 4.75 8077 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.75 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $29 million in CBIO’s case. Gulfport Energy Corporation (NASDAQ:GPOR) is the most popular stock in this table. On the other hand Protalix BioTherapeutics Inc. (NYSE:PLX) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Catalyst Biosciences Inc (NASDAQ:CBIO) 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 12.3% in 2020 through June 30th but still managed to beat the market by 15.5 percentage points. Hedge funds were also right about betting on CBIO as the stock returned 34.3% in Q2 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.