Is Hancock Jaffe Laboratories (HJLI) A Good Stock To Buy?

In this article we will analyze whether Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is HJLI a good stock to buy? Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI) has experienced an increase in hedge fund interest in recent months. Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI) was in 3 hedge funds’ portfolios at the end of March. The all time high for this statistic is 1. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HJLI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Millennium Management, Catapult Capital Management

Israel Englander of Millennium Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to take a look at the key hedge fund action encompassing Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI).

Do Hedge Funds Think HJLI Is A Good Stock To Buy Now?

At first quarter’s end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3 from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HJLI over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI) was held by AIGH Investment Partners, which reported holding $2.9 million worth of stock at the end of December. It was followed by Millennium Management with a $0.2 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

As one would reasonably expect, some big names have been driving this bullishness. AIGH Investment Partners, managed by Orin Hirschman, established the most valuable position in Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI). AIGH Investment Partners had $2.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.2 million position during the quarter. The only other fund with a brand new HJLI position is Ken Griffin’s Citadel Investment Group.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI) but similarly valued. These stocks are William Penn Bancorporation (NASDAQ:WMPN), MDJM Ltd (NASDAQ:MDJH), AirNet Technology Inc. (NASDAQ:ANTE), MV Oil Trust (NYSE:MVO), Perma-Pipe International Holdings, Inc. (NASDAQ:PPIH), NanoViricides Inc (NYSE:NNVC), and Bio-Path Holdings, Inc. (NASDAQ:BPTH). This group of stocks’ market values match HJLI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WMPN 2 4916 2
MDJH 2 164 2
ANTE 3 428 2
MVO 1 128 0
PPIH 1 1561 -1
NNVC 2 207 0
BPTH 3 1168 2
Average 2 1225 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $3 million in HJLI’s case. AirNet Technology Inc. (NASDAQ:ANTE) is the most popular stock in this table. On the other hand MV Oil Trust (NYSE:MVO) is the least popular one with only 1 bullish hedge fund positions. Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HJLI is 88. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately HJLI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HJLI were disappointed as the stock returned -5.4% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.