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).
Is LNTH a good stock to buy now? The smart money was getting less bullish. The number of long hedge fund bets retreated by 4 recently. Lantheus Holdings Inc (NASDAQ:LNTH) was in 16 hedge funds’ portfolios at the end of September. The all time high for this statistic is 21. 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 for a quick look at the top 5 stocks). There were 20 hedge funds in our database with LNTH positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are numerous indicators stock market investors employ to grade publicly traded companies. A duo of the less utilized indicators are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outpace the broader indices by a very impressive amount (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 we’re going to analyze the fresh hedge fund action regarding Lantheus Holdings Inc (NASDAQ:LNTH).
Do Hedge Funds Think LNTH Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LNTH over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
More specifically, Armistice Capital was the largest shareholder of Lantheus Holdings Inc (NASDAQ:LNTH), with a stake worth $61.3 million reported as of the end of September. Trailing Armistice Capital was Farallon Capital, which amassed a stake valued at $33.6 million. Private Capital Management, Tamarack Capital Management, and Great Point Partners 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 Tamarack Capital Management allocated the biggest weight to Lantheus Holdings Inc (NASDAQ:LNTH), around 3.71% of its 13F portfolio. Soleus Capital is also relatively very bullish on the stock, dishing out 3.42 percent of its 13F equity portfolio to LNTH.
Seeing as Lantheus Holdings Inc (NASDAQ:LNTH) has faced falling interest from the aggregate hedge fund industry, we can see that there exists a select few funds who sold off their positions entirely heading into Q4. Intriguingly, David Harding’s Winton Capital Management said goodbye to the biggest position of all the hedgies followed by Insider Monkey, valued at close to $1.6 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dropped its stock, about $1.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks similar to Lantheus Holdings Inc (NASDAQ:LNTH). These stocks are Perdoceo Education Corporation (NASDAQ:PRDO), OneSpan Inc. (NASDAQ:OSPN), Veritex Holdings Inc (NASDAQ:VBTX), ProAssurance Corporation (NYSE:PRA), Vericel Corp (NASDAQ:VCEL), Morphic Holding, Inc. (NASDAQ:MORF), and Cango Inc. (NYSE:CANG). 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|
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As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $150 million in LNTH’s case. Vericel Corp (NASDAQ:VCEL) is the most popular stock in this table. On the other hand Cango Inc. (NYSE:CANG) 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. Our overall hedge fund sentiment score for LNTH is 62.7. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on LNTH as the stock returned 11.7% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.