While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Palatin Technologies, Inc. (NYSE:PTN).
Palatin Technologies, Inc. (NYSE:PTN) investors should pay attention to a decrease in enthusiasm from smart money recently. Palatin Technologies, Inc. (NYSE:PTN) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. There were 13 hedge funds in our database with PTN holdings at the end of June. Our calculations also showed that PTN 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are plenty of signals stock market investors can use to value publicly traded companies. Two of the less utilized signals are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a solid margin (see the details here).
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 10 most profitable companies in the world 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. Now we’re going to check out the key hedge fund action surrounding Palatin Technologies, Inc. (NYSE:PTN).
What does smart money think about Palatin Technologies, Inc. (NYSE:PTN)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -69% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PTN over the last 21 quarters. So, let’s examine 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 Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the largest position in Palatin Technologies, Inc. (NYSE:PTN), worth close to $1.2 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Winton Capital Management, managed by David Harding, which holds a $0.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Palatin Technologies, Inc. (NYSE:PTN), around 0.03% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, earmarking 0.0019 percent of its 13F equity portfolio to PTN.
Judging by the fact that Palatin Technologies, Inc. (NYSE:PTN) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of fund managers who were dropping their entire stakes in the third quarter. Intriguingly, Donald Sussman’s Paloma Partners dumped the largest investment of the 750 funds watched by Insider Monkey, valued at about $0.3 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $0.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 9 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Palatin Technologies, Inc. (NYSE:PTN). These stocks are Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), C&F Financial Corp (NASDAQ:CFFI), Clipper Realty Inc. (NYSE:CLPR), Everspin Technologies, Inc. (NASDAQ:MRAM), Alaska Communications Systems Group Inc (NASDAQ:ALSK), BankFinancial Corporation (NASDAQ:BFIN), and Reading International Inc (NASDAQ:RDIB). All of these stocks’ market caps resemble PTN’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 6.4 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $2 million in PTN’s case. Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) is the most popular stock in this table. On the other hand Reading International Inc (NASDAQ:RDIB) is the least popular one with only 1 bullish hedge fund positions. Palatin Technologies, Inc. (NYSE:PTN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PTN is 15.9. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 16.1 percentage points. Unfortunately PTN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PTN investors were disappointed as the stock returned -4.3% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Palatin Technologies Inc (NYSEMKT:PTN)
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Disclosure: None. This article was originally published at Insider Monkey.