In this article you are going to find out whether hedge funds think Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. BLCM was in 6 hedge funds’ portfolios at the end of March. There were 7 hedge funds in our database with BLCM holdings at the end of the previous quarter. Our calculations also showed that BLCM 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings 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’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.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 let’s go over the recent hedge fund action regarding Bellicum Pharmaceuticals Inc (NASDAQ:BLCM).
What does smart money think about Bellicum Pharmaceuticals Inc (NASDAQ:BLCM)?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the fourth quarter of 2019. By comparison, 8 hedge funds held shares or bullish call options in BLCM a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
More specifically, Baker Bros. Advisors was the largest shareholder of Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), with a stake worth $1.2 million reported as of the end of September. Trailing Baker Bros. Advisors was Renaissance Technologies, which amassed a stake valued at $1.1 million. Alyeska Investment Group, Frazier Healthcare Partners, and Sabby Capital 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 Frazier Healthcare Partners allocated the biggest weight to Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), around 0.06% of its 13F portfolio. Sabby Capital is also relatively very bullish on the stock, earmarking 0.04 percent of its 13F equity portfolio to BLCM.
Seeing as Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that decided to sell off their full holdings heading into Q4. It’s worth mentioning that D. E. Shaw’s D E Shaw sold off the largest stake of the “upper crust” of funds followed by Insider Monkey, comprising about $0.2 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund said goodbye to about $0.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Bellicum Pharmaceuticals Inc (NASDAQ:BLCM). We will take a look at Sotherly Hotels Inc (NASDAQ:SOHO), Hi-Crush Inc. (NYSE:HCR), Newater Technology, Inc. (NASDAQ:NEWA), and Allena Pharmaceuticals, Inc. (NASDAQ:ALNA). This group of stocks’ market caps are similar to BLCM’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 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $3 million in BLCM’s case. Allena Pharmaceuticals, Inc. (NASDAQ:ALNA) is the most popular stock in this table. On the other hand Newater Technology, Inc. (NASDAQ:NEWA) is the least popular one with only 1 bullish hedge fund positions. Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is not the most popular stock in this group but hedge fund interest is still above average. 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 gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on BLCM as the stock returned 76% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.