Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Galena Biopharma Inc (NASDAQ:GALE).
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Galena Biopharma Inc was in 4 hedge funds’ portfolio at the end of September. GALE shareholders have witnessed a decrease in hedge fund sentiment of late. There were 5 hedge funds in our database with GALE positions at the end of the previous quarter. At the end of this article we will also compare GALE to other stocks including Career Education Corp. (NASDAQ:CECO), Global Ship Lease, Inc. (NYSE:GSL), and Agilysys, Inc. (NASDAQ:AGYS) to get a better sense of its popularity.
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How are hedge funds trading Galena Biopharma Inc (NASDAQ:GALE)?
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey were long in this stock, a change of -20% from the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.
Of the funds tracked by Insider Monkey, Anand Parekh’s Alyeska Investment Group had the biggest call position in Galena Biopharma Inc (NASDAQ:GALE), worth close to $2.5 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $0.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions contain quant fund D. E. Shaw and Ken Fisher’s Fisher Asset Management.
Seeing as Galena Biopharma Inc (NASDAQ:GALE) has experienced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few fund managers that slashed their positions entirely at the end of the third quarter. Intriguingly, James Dondero’s Highland Capital Management sold off the biggest stake of the 700 funds tracked by Insider Monkey, totaling an estimated $2.4 million in stock, and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund cut its tiny $19 thousand position.
Let’s also take a look at hedge fund activity in other stocks similar to Galena Biopharma Inc (NASDAQ:GALE). We will take a look at Career Education Corp. (NASDAQ:CECO), Global Ship Lease, Inc. (NYSE:GSL), Agilysys, Inc. (NASDAQ:AGYS), and BankFinancial Corporation (NASDAQ:BFIN). All of these stocks’ market caps are closest to GALE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CECO | 13 | 48003 | -3 |
| GSL | 5 | 6417 | 1 |
| AGYS | 13 | 141888 | 3 |
| BFIN | 4 | 34741 | 1 |
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. Career Education Corp. (NASDAQ:CECO) is the most popular stock in this table. On the other hand BankFinancial Corporation (NASDAQ:BFIN) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Galena Biopharma Inc (NASDAQ:GALE) is at the bottom of the range. Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
