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Is Lantheus Holdings Inc (LNTH) Going to Burn These Hedge Funds?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Lantheus Holdings Inc (NASDAQ:LNTH).

Lantheus Holdings Inc (NASDAQ:LNTH) investors should pay attention to a decrease in hedge fund interest lately. LNTH was in 13 hedge funds’ portfolios at the end of the third quarter of 2019. There were 15 hedge funds in our database with LNTH holdings at the end of the previous quarter. Our calculations also showed that LNTH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most stock holders, hedge funds are viewed as worthless, old financial vehicles of the past. While there are more than 8000 funds with their doors open at the moment, Our researchers look at the crème de la crème of this club, about 750 funds. These hedge fund managers handle bulk of the smart money’s total asset base, and by observing their best stock picks, Insider Monkey has spotted many investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .

GOTHAM ASSET MANAGEMENT

Joel Greenblatt of Gotham Asset Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to go over the key hedge fund action regarding Lantheus Holdings Inc (NASDAQ:LNTH).

What have hedge funds been doing with Lantheus Holdings Inc (NASDAQ:LNTH)?

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in LNTH a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Lantheus Holdings Inc (NASDAQ:LNTH), with a stake worth $41 million reported as of the end of September. Trailing Renaissance Technologies was Tamarack Capital Management, which amassed a stake valued at $18.8 million. Cloverdale Capital Management, AQR Capital Management, and Royce & Associates 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 Cloverdale Capital Management allocated the biggest weight to Lantheus Holdings Inc (NASDAQ:LNTH), around 9.36% of its 13F portfolio. Tamarack Capital Management is also relatively very bullish on the stock, earmarking 4.9 percent of its 13F equity portfolio to LNTH.

Seeing as Lantheus Holdings Inc (NASDAQ:LNTH) has experienced a decline in interest from the smart money, logic holds that there was a specific group of funds who were dropping their full holdings by the end of the third quarter. Interestingly, Paul Hondros’s AlphaOne Capital Partners dumped the largest investment of the 750 funds followed by Insider Monkey, worth an estimated $1.1 million in stock, and Minhua Zhang’s Weld Capital Management was right behind this move, as the fund sold off about $0.6 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to Lantheus Holdings Inc (NASDAQ:LNTH). These stocks are Greenbrier Companies Inc (NYSE:GBX), Boston Private Financial Hldg Inc (NASDAQ:BPFH), Infinera Corp. (NASDAQ:INFN), and Materialise NV (NASDAQ:MTLS). This group of stocks’ market valuations are similar to LNTH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GBX 8 21653 -6
BPFH 13 66868 0
INFN 18 175494 7
MTLS 2 9352 0
Average 10.25 68342 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $101 million in LNTH’s case. Infinera Corp. (NASDAQ:INFN) is the most popular stock in this table. On the other hand Materialise NV (NASDAQ:MTLS) is the least popular one with only 2 bullish hedge fund positions. Lantheus Holdings Inc (NASDAQ:LNTH) is not the most popular stock in this group but hedge fund interest is still above average. 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately LNTH wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LNTH were disappointed as the stock returned -16.6% during the fourth quarter (through the end of November) 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.

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