At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Bioline RX Ltd (NASDAQ:BLRX).
Hedge fund interest in Bioline RX Ltd (NASDAQ:BLRX) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BLRX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare BLRX to other stocks including BioCardia, Inc. (NASDAQ:BCDA), Air T, Inc. (NASDAQ:AIRT), and NCS Multistage Holdings, Inc. (NASDAQ:NCSM) to get a better sense of its popularity.
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 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to analyze the recent hedge fund action surrounding Bioline RX Ltd (NASDAQ:BLRX).
How have hedgies been trading Bioline RX Ltd (NASDAQ:BLRX)?
Heading into the fourth quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BLRX over the last 21 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the largest position in Bioline RX Ltd (NASDAQ:BLRX). Biotechnology Value Fund / BVF Inc has a $2.8 million position in the stock, comprising 0.2% of its 13F portfolio. On Biotechnology Value Fund / BVF Inc’s heels is Rima Senvest Management, managed by Richard Mashaal, which holds a $0.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions encompass Renaissance Technologies, Samuel Isaly’s OrbiMed Advisors and James A. Silverman’s Opaleye Management. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Bioline RX Ltd (NASDAQ:BLRX), around 0.15% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to BLRX.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Bioline RX Ltd (NASDAQ:BLRX) but similarly valued. We will take a look at BioCardia, Inc. (NASDAQ:BCDA), Air T, Inc. (NASDAQ:AIRT), NCS Multistage Holdings, Inc. (NASDAQ:NCSM), IRIDEX Corporation (NASDAQ:IRIX), Advaxis, Inc. (NASDAQ:ADXS), IMPAC Mortgage Holdings, Inc (NYSE:IMH), and Avinger Inc (NASDAQ:AVGR). All of these stocks’ market caps are closest to BLRX’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 2.6 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $4 million in BLRX’s case. IMPAC Mortgage Holdings, Inc (NYSE:IMH) is the most popular stock in this table. On the other hand BioCardia, Inc. (NASDAQ:BCDA) is the least popular one with only 1 bullish hedge fund positions. Bioline RX Ltd (NASDAQ:BLRX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BLRX is 71.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on BLRX as the stock returned 41.5% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.