While the market driven by short-term sentiment influenced by the accommodative 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 Aptose Biosciences Inc (NASDAQ:APTO).
Is APTO a good stock to buy now? The smart money was taking a bullish view. The number of bullish hedge fund bets inched up by 3 in recent months. Aptose Biosciences Inc (NASDAQ:APTO) was in 21 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that APTO 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 18 hedge funds in our database with APTO positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are dozens of indicators stock traders have at their disposal to analyze their holdings. A duo of the most useful indicators are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top fund managers can outclass the market by a significant amount (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 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 view the new hedge fund action regarding Aptose Biosciences Inc (NASDAQ:APTO).
Do Hedge Funds Think APTO Is A Good Stock To Buy Now?
At the end of September, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in APTO over the last 21 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Mitchell Blutt’s Consonance Capital Management has the largest position in Aptose Biosciences Inc (NASDAQ:APTO), worth close to $48 million, comprising 5.8% of its total 13F portfolio. Coming in second is Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, which holds a $41.3 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Mark Hart III’s Corriente Advisors, Steve Cohen’s Point72 Asset Management and Brian Ashford-Russell and Tim Woolley’s Polar Capital. In terms of the portfolio weights assigned to each position Corriente Advisors allocated the biggest weight to Aptose Biosciences Inc (NASDAQ:APTO), around 10.44% of its 13F portfolio. Consonance Capital Management is also relatively very bullish on the stock, earmarking 5.84 percent of its 13F equity portfolio to APTO.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, assembled the biggest position in Aptose Biosciences Inc (NASDAQ:APTO). Point72 Asset Management had $12.4 million invested in the company at the end of the quarter. Vishal Saluja and Pham Quang’s Endurant Capital Management also made a $2.1 million investment in the stock during the quarter. The following funds were also among the new APTO investors: Noam Gottesman’s GLG Partners and Neil Shahrestani’s Ikarian Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Aptose Biosciences Inc (NASDAQ:APTO). We will take a look at 89bio, Inc. (NASDAQ:ETNB), Nordic American Tankers Ltd (NYSE:NAT), Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), Rite Aid Corporation (NYSE:RAD), Quotient Limited (NASDAQ:QTNT), Odonate Therapeutics, Inc. (NASDAQ:ODT), and ViewRay, Inc. (NASDAQ:VRAY). This group of stocks’ market valuations are closest to APTO’s market valuation.
|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 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $201 million in APTO’s case. Quotient Limited (NASDAQ:QTNT) is the most popular stock in this table. On the other hand Nordic American Tankers Ltd (NYSE:NAT) is the least popular one with only 10 bullish hedge fund positions. Aptose Biosciences Inc (NASDAQ:APTO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for APTO is 72.4. 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 positive signal but 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 December 14th and beat the market again by 15.8 percentage points. Unfortunately APTO wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on APTO were disappointed as the stock returned -32.7% since the end of September (through 12/14) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.