How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Caladrius Biosciences Inc (NASDAQ:CLBS).
Caladrius Biosciences Inc (NASDAQ:CLBS) shareholders have witnessed an increase in hedge fund interest in recent months. Caladrius Biosciences Inc (NASDAQ:CLBS) was in 4 hedge funds’ portfolios at the end of September. The all time high for this statistics is 6. There were 1 hedge funds in our database with CLBS holdings at the end of June. Our calculations also showed that CLBS 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 10 most profitable companies in the world 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. Now we’re going to view the recent hedge fund action surrounding Caladrius Biosciences Inc (NASDAQ:CLBS).
What have hedge funds been doing with Caladrius Biosciences Inc (NASDAQ:CLBS)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 300% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CLBS over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the number one position in Caladrius Biosciences Inc (NASDAQ:CLBS). Renaissance Technologies has a $1.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Hal Mintz of Sabby Capital, with a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish contain Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Caladrius Biosciences Inc (NASDAQ:CLBS), around 0.03% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0017 percent of its 13F equity portfolio to CLBS.
Now, key hedge funds have jumped into Caladrius Biosciences Inc (NASDAQ:CLBS) headfirst. Sabby Capital, managed by Hal Mintz, established the most outsized position in Caladrius Biosciences Inc (NASDAQ:CLBS). Sabby Capital had $0.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.1 million position during the quarter. The only other fund with a brand new CLBS position is Israel Englander’s Millennium Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Caladrius Biosciences Inc (NASDAQ:CLBS) but similarly valued. These stocks are Sundial Growers Inc. (NASDAQ:SNDL), Transenterix Inc (NYSE:TRXC), QuickLogic Corporation (NASDAQ:QUIK), Acer Therapeutics Inc. (NASDAQ:ACER), Support.com, Inc. (NASDAQ:SPRT), Newgioco Group, Inc. (NYSE:NWGI), and Virco Mfg. Corporation (NASDAQ:VIRC). This group of stocks’ market caps match CLBS’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 3 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $2 million in CLBS’s case. Sundial Growers Inc. (NASDAQ:SNDL) is the most popular stock in this table. On the other hand QuickLogic Corporation (NASDAQ:QUIK) is the least popular one with only 1 bullish hedge fund positions. Caladrius Biosciences Inc (NASDAQ:CLBS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CLBS is 58. 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 November 27th and beat the market again by 16.1 percentage points. Unfortunately CLBS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CLBS were disappointed as the stock returned -17.2% since the end of September (through 11/27) 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.