While the market driven by short-term sentiment influenced by the accomodative 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 CASI Pharmaceuticals Inc (NASDAQ:CASI).
Is CASI a good stock to buy now? The smart money was in a bullish mood. The number of long hedge fund positions rose by 4 in recent months. CASI Pharmaceuticals Inc (NASDAQ:CASI) was in 10 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 6. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CASI 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.
According to most shareholders, hedge funds are seen as worthless, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at the moment, Our researchers choose to focus on the masters of this club, approximately 850 funds. It is estimated that this group of investors handle bulk of all hedge funds’ total asset base, and by paying attention to their highest performing picks, Insider Monkey has spotted a number of investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 go over the latest hedge fund action encompassing CASI Pharmaceuticals Inc (NASDAQ:CASI).
Do Hedge Funds Think CASI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CASI over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Consonance Capital Management was the largest shareholder of CASI Pharmaceuticals Inc (NASDAQ:CASI), with a stake worth $10 million reported as of the end of September. Trailing Consonance Capital Management was Ikarian Capital, which amassed a stake valued at $2.4 million. Millennium Management, Renaissance Technologies, and Sio Capital 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 Consonance Capital Management allocated the biggest weight to CASI Pharmaceuticals Inc (NASDAQ:CASI), around 1.22% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, earmarking 0.17 percent of its 13F equity portfolio to CASI.
As one would reasonably expect, some big names were breaking ground themselves. Consonance Capital Management, managed by Mitchell Blutt, created the biggest position in CASI Pharmaceuticals Inc (NASDAQ:CASI). Consonance Capital Management had $10 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1 million position during the quarter. The other funds with brand new CASI positions are Michael Castor’s Sio Capital, John Overdeck and David Siegel’s Two Sigma Advisors, and D. E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks similar to CASI Pharmaceuticals Inc (NASDAQ:CASI). We will take a look at Immersion Corporation (NASDAQ:IMMR), Rekor Systems, Inc. (NASDAQ:REKR), Fluent, Inc. (NASDAQ:FLNT), Secoo Holding Limited (NASDAQ:SECO), Protective Insurance Corporation (NASDAQ:PTVCB), Regional Management Corp (NYSE:RM), and Gaia, Inc. (NASDAQ:GAIA). This group of stocks’ market values match CASI’s market value.
|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 10.1 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $15 million in CASI’s case. Immersion Corporation (NASDAQ:IMMR) is the most popular stock in this table. On the other hand Secoo Holding Limited (NASDAQ:SECO) is the least popular one with only 4 bullish hedge fund positions. CASI Pharmaceuticals Inc (NASDAQ:CASI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CASI is 56.6. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CASI as the stock returned 58.2% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.