Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Cellular Biomedicine Group, Inc. (NASDAQ:CBMG).
Is CBMG a good stock to buy now? Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) has experienced an increase in hedge fund sentiment lately. Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) was in 7 hedge funds’ portfolios at the end of September. The all time high for this statistics is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CBMG 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.
In today’s marketplace there are numerous gauges stock traders use to assess stocks. A pair of the most underrated gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can outpace the broader indices by a very impressive margin (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 let’s analyze the latest hedge fund action encompassing Cellular Biomedicine Group, Inc. (NASDAQ:CBMG).
Hedge fund activity in Cellular Biomedicine Group, Inc. (NASDAQ:CBMG)
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 75% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in CBMG a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, GLG Partners held the most valuable stake in Cellular Biomedicine Group, Inc. (NASDAQ:CBMG), which was worth $4.5 million at the end of the third quarter. On the second spot was Hillhouse Capital Management which amassed $4.3 million worth of shares. Glazer Capital, Water Island Capital, and Pentwater Capital Management 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 Water Island Capital allocated the biggest weight to Cellular Biomedicine Group, Inc. (NASDAQ:CBMG), around 0.21% of its 13F portfolio. Glazer Capital is also relatively very bullish on the stock, setting aside 0.18 percent of its 13F equity portfolio to CBMG.
As one would reasonably expect, some big names have been driving this bullishness. Glazer Capital, managed by Paul Glazer, assembled the most outsized position in Cellular Biomedicine Group, Inc. (NASDAQ:CBMG). Glazer Capital had $3.7 million invested in the company at the end of the quarter. John Orrico’s Water Island Capital also made a $2.4 million investment in the stock during the quarter. The other funds with brand new CBMG positions are Matthew Halbower’s Pentwater Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Donald Sussman’s Paloma Partners.
Let’s go over hedge fund activity in other stocks similar to Cellular Biomedicine Group, Inc. (NASDAQ:CBMG). We will take a look at Superior Group of Companies, Inc. (NASDAQ:SGC), Fortress Biotech Inc (NASDAQ:FBIO), Bluegreen Vacations Corporation (NYSE:BXG), Cardiff Oncology, Inc. (NASDAQ:CRDF), ShotSpotter, Inc. (NASDAQ:SSTI), Waitr Holdings Inc. (NASDAQ:WTRH), and iBio, Inc. (NYSE:IBIO). All of these stocks’ market caps are similar to CBMG’s market cap.
|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 8.9 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $18 million in CBMG’s case. Cardiff Oncology, Inc. (NASDAQ:CRDF) is the most popular stock in this table. On the other hand iBio, Inc. (NYSE:IBIO) is the least popular one with only 3 bullish hedge fund positions. Cellular Biomedicine Group, Inc. (NASDAQ:CBMG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CBMG is 52.3. 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 negative signal and 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 31.6% in 2020 through December 2nd and surpassed the market again by 16 percentage points. Unfortunately CBMG wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CBMG investors were disappointed as the stock returned 1.6% since the end of September (through 12/2) 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 most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.