The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Athenex, Inc. (NASDAQ:ATNX) based on those filings.
Hedge fund interest in Athenex, Inc. (NASDAQ:ATNX) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Eventbrite, Inc. (NYSE:EB), Triumph Bancorp Inc (NASDAQ:TBK), and Eagle Pharmaceuticals Inc (NASDAQ:EGRX) to gather more data points. Our calculations also showed that ATNX isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
Today there are many metrics shareholders use to value publicly traded companies. Two of the most underrated metrics are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the top money managers can outclass the broader indices by a significant amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the recent hedge fund action surrounding Athenex, Inc. (NASDAQ:ATNX).
How have hedgies been trading Athenex, Inc. (NASDAQ:ATNX)?
At Q1’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. By comparison, 8 hedge funds held shares or bullish call options in ATNX a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Perceptive Advisors was the largest shareholder of Athenex, Inc. (NASDAQ:ATNX), with a stake worth $89.3 million reported as of the end of September. Trailing Perceptive Advisors was Avoro Capital Advisors (venBio Select Advisor), which amassed a stake valued at $37.7 million. OrbiMed Advisors, Kingdon Capital, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Kingdon Capital allocated the biggest weight to Athenex, Inc. (NASDAQ:ATNX), around 5.27% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, dishing out 2.32 percent of its 13F equity portfolio to ATNX.
Since Athenex, Inc. (NASDAQ:ATNX) has faced falling interest from the aggregate hedge fund industry, we can see that there were a few money managers who sold off their positions entirely by the end of the first quarter. Interestingly, David Halpert’s Prince Street Capital Management cut the largest investment of the 750 funds followed by Insider Monkey, worth an estimated $1 million in stock. Parvinder Thiara’s fund, Athanor Capital, also dropped its stock, about $0.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Athenex, Inc. (NASDAQ:ATNX) but similarly valued. These stocks are Eventbrite, Inc. (NYSE:EB), Triumph Bancorp Inc (NASDAQ:TBK), Eagle Pharmaceuticals Inc (NASDAQ:EGRX), and The Andersons, Inc. (NASDAQ:ANDE). All of these stocks’ market caps match ATNX’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 13 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. That figure was $197 million in ATNX’s case. Eventbrite, Inc. (NYSE:EB) is the most popular stock in this table. On the other hand Triumph Bancorp Inc (NASDAQ:TBK) is the least popular one with only 6 bullish hedge fund positions. Athenex, Inc. (NASDAQ:ATNX) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on ATNX as the stock returned 72.5% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.