In this article we will take a look at whether hedge funds think Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is ARCT a good stock to buy now? Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) investors should be aware of a decrease in support from the world’s most elite money managers in recent months. Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) was in 20 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 21. There were 21 hedge funds in our database with ARCT holdings at the end of June. Our calculations also showed that ARCT 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. Now we’re going to analyze the key hedge fund action encompassing Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT).
Do Hedge Funds Think ARCT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in ARCT a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) was held by Healthcor Management LP, which reported holding $68.4 million worth of stock at the end of September. It was followed by Cormorant Asset Management with a $30 million position. Other investors bullish on the company included OrbiMed Advisors, Citadel Investment Group, and DAFNA Capital Management. In terms of the portfolio weights assigned to each position DAFNA Capital Management allocated the biggest weight to Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT), around 3.2% of its 13F portfolio. Healthcor Management LP is also relatively very bullish on the stock, designating 2.74 percent of its 13F equity portfolio to ARCT.
Judging by the fact that Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) has witnessed falling interest from hedge fund managers, we can see that there lies a certain “tier” of funds who sold off their positions entirely heading into Q4. Interestingly, Steve Cohen’s Point72 Asset Management sold off the largest investment of all the hedgies followed by Insider Monkey, worth close to $10.4 million in stock. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also said goodbye to its stock, about $4.7 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) but similarly valued. We will take a look at Ontrak, Inc. (NASDAQ:OTRK), Safety Insurance Group, Inc. (NASDAQ:SAFT), Cerus Corporation (NASDAQ:CERS), Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA), BP Midstream Partners LP (NYSE:BPMP), TriMas Corp (NASDAQ:TRS), and Esperion Therapeutics (NASDAQ:ESPR). This group of stocks’ market values are closest to ARCT’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $172 million in ARCT’s case. Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA) is the most popular stock in this table. On the other hand BP Midstream Partners LP (NYSE:BPMP) is the least popular one with only 5 bullish hedge fund positions. Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ARCT is 82.6. 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 December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on ARCT as the stock returned 150.7% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.