Is 9 Meters Biopharma (NMTR) A Good Stock To Buy Now?

In this article you are going to find out whether hedge funds think 9 Meters Biopharma, Inc. (NASDAQ:NMTR) 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.

Is 9 Meters Biopharma (NMTR) a good stock to buy now? Prominent investors were taking a bullish view. The number of long hedge fund bets improved by 2 in recent months. 9 Meters Biopharma, Inc. (NASDAQ:NMTR) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NMTR 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). There were 3 hedge funds in our database with NMTR positions at the end of the second quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

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Michael Gelband of ExodusPoint Capital

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 take a glance at the key hedge fund action regarding 9 Meters Biopharma, Inc. (NASDAQ:NMTR).

Hedge fund activity in 9 Meters Biopharma, Inc. (NASDAQ:NMTR)

At the end of September, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NMTR over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the largest position in 9 Meters Biopharma, Inc. (NASDAQ:NMTR). OrbiMed Advisors has a $20.5 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which holds a $0.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish encompass Renaissance Technologies, Michael Gelband’s ExodusPoint Capital and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position OrbiMed Advisors allocated the biggest weight to 9 Meters Biopharma, Inc. (NASDAQ:NMTR), around 0.26% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, setting aside 0.0029 percent of its 13F equity portfolio to NMTR.

As one would reasonably expect, key hedge funds have jumped into 9 Meters Biopharma, Inc. (NASDAQ:NMTR) headfirst. Millennium Management, managed by Israel Englander, initiated the most valuable position in 9 Meters Biopharma, Inc. (NASDAQ:NMTR). Millennium Management had $0.8 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s now take a look at hedge fund activity in other stocks similar to 9 Meters Biopharma, Inc. (NASDAQ:NMTR). These stocks are Ferroglobe PLC (NASDAQ:GSM), MTBC, Inc. (NASDAQ:MTBC), StealthGas Inc. (NASDAQ:GASS), Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS), PRGX Global Inc (NASDAQ:PRGX), Intrepid Potash, Inc. (NYSE:IPI), and Identiv, Inc. (NASDAQ:INVE). All of these stocks’ market caps are closest to NMTR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GSM 9 11679 -2
MTBC 4 7636 -2
GASS 5 44165 0
CRVS 7 52499 -2
PRGX 9 38796 -1
IPI 7 3023 -1
INVE 8 12583 6
Average 7 24340 -0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $22 million in NMTR’s case. Ferroglobe PLC (NASDAQ:GSM) is the most popular stock in this table. On the other hand MTBC, Inc. (NASDAQ:MTBC) is the least popular one with only 4 bullish hedge fund positions. 9 Meters Biopharma, Inc. (NASDAQ:NMTR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NMTR is 47. 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. A small number of hedge funds were also right about betting on NMTR as the stock returned 31.3% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.