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 Cidara Therapeutics Inc (NASDAQ:CDTX) based on that data and determine whether they were really smart about the stock.
Cidara Therapeutics Inc (NASDAQ:CDTX) was in 10 hedge funds’ portfolios at the end of March. CDTX investors should be aware of an increase in hedge fund interest recently. There were 9 hedge funds in our database with CDTX positions at the end of the previous quarter. Our calculations also showed that CDTX 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.
In the financial world there are many tools stock market investors put to use to analyze their holdings. Some of the most useful tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the S&P 500 by a healthy amount (see the details here).
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 Cidara Therapeutics Inc (NASDAQ:CDTX).
How have hedgies been trading Cidara Therapeutics Inc (NASDAQ:CDTX)?
At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in CDTX a year ago. So, let’s check out 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, Mark Lampert’s Biotechnology Value Fund / BVF Inc has the most valuable position in Cidara Therapeutics Inc (NASDAQ:CDTX), worth close to $9.5 million, amounting to 0.9% of its total 13F portfolio. The second most bullish fund manager is Frazier Healthcare Partners, led by Alan Frazier, holding a $3.3 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions consist of Timothy P. Lynch’s Stonepine Capital, Renaissance Technologies and James A. Silverman’s Opaleye Management. In terms of the portfolio weights assigned to each position Stonepine Capital allocated the biggest weight to Cidara Therapeutics Inc (NASDAQ:CDTX), around 3.42% of its 13F portfolio. Biotechnology Value Fund / BVF Inc is also relatively very bullish on the stock, setting aside 0.88 percent of its 13F equity portfolio to CDTX.
Now, some big names have been driving this bullishness. Stonepine Capital, managed by Timothy P. Lynch, established the biggest position in Cidara Therapeutics Inc (NASDAQ:CDTX). Stonepine Capital had $3.2 million invested in the company at the end of the quarter. James A. Silverman’s Opaleye Management also made a $2.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Michael Gelband’s ExodusPoint Capital.
Let’s also examine hedge fund activity in other stocks similar to Cidara Therapeutics Inc (NASDAQ:CDTX). These stocks are SEACOR Marine Holdings Inc. (NYSE:SMHI), FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), Adams Resources & Energy Inc (NYSE:AE), and PowerFleet, Inc. (NASDAQ:PWFL). This group of stocks’ market caps are similar to CDTX’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 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $22 million in CDTX’s case. PowerFleet, Inc. (NASDAQ:PWFL) is the most popular stock in this table. On the other hand FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW) is the least popular one with only 1 bullish hedge fund positions. Cidara Therapeutics Inc (NASDAQ:CDTX) 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 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on CDTX as the stock returned 48.8% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.