It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX) .
Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX) was in 7 hedge funds’ portfolios at the end of September. AKTX has experienced a decrease in support from the world’s most successful money managers of late. There were 9 hedge funds in our database with AKTX positions at the end of the previous year. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cherokee Inc. (NASDAQ:CHKE), Fate Therapeutics Inc (NASDAQ:FATE), and PC Tel Inc (NASDAQ:PCTI) to gather more data points.
Follow Akari Therapeutics Plc (NASDAQ:AKTX)
Follow Akari Therapeutics Plc (NASDAQ:AKTX)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, let’s analyze the new action encompassing Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX).
How have hedgies been trading Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in AKTX at the beginning of this year. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, James E. Flynn’s Deerfield Management has the number one position in Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX), worth close to $9.8 million, amounting to 0.5% of its total 13F portfolio. On Deerfield Management’s heels is Julian Baker and Felix Baker of Baker Bros. Advisors, with a $4.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions consist of Daniel Gold’s QVT Financial, Anders Hove and Bong Koh’s VHCP Management and Peter Kolchinsky’s RA Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually sold off their positions entirely. At the top of the heap, Oleg Nodelman’s EcoR1 Capital sold off the largest stake of the “upper crust” of funds monitored by Insider Monkey, totaling close to $0.9 million in stock, and Nathan Fischel’s DAFNA Capital Management was right behind this move, as the fund sold off about $0 million worth of shares.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX) but similarly valued. We will take a look at Cherokee Inc. (NASDAQ:CHKE), Fate Therapeutics Inc (NASDAQ:FATE), PC Tel Inc (NASDAQ:PCTI), and Tremor Video Inc (NYSE:TRMR). This group of stocks’ market caps resemble AKTX’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $19 million in AKTX’s case. Cherokee Inc. (NASDAQ:CHKE) is the most popular stock in this table. On the other hand Tremor Video Inc (NYSE:TRMR) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.