In this article we will take a look at whether hedge funds think Milestone Pharmaceuticals Inc. (NASDAQ:MIST) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Milestone Pharmaceuticals Inc. (NASDAQ:MIST) a good stock to buy now? The best stock pickers were taking an optimistic view. The number of long hedge fund bets increased by 3 in recent months. Milestone Pharmaceuticals Inc. (NASDAQ:MIST) was in 6 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 7. Our calculations also showed that MIST 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.
According to most stock holders, hedge funds are seen as unimportant, old financial tools of yesteryear. While there are over 8000 funds with their doors open at the moment, Our experts choose to focus on the bigwigs of this group, around 850 funds. These hedge fund managers handle the lion’s share of the smart money’s total asset base, and by paying attention to their top equity investments, Insider Monkey has revealed a few investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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. Keeping this in mind let’s view the recent hedge fund action regarding Milestone Pharmaceuticals Inc. (NASDAQ:MIST).
What have hedge funds been doing with Milestone Pharmaceuticals Inc. (NASDAQ:MIST)?
Heading into the fourth quarter of 2020, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in MIST a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Among these funds, RA Capital Management held the most valuable stake in Milestone Pharmaceuticals Inc. (NASDAQ:MIST), which was worth $17.7 million at the end of the third quarter. On the second spot was Ikarian Capital which amassed $12.8 million worth of shares. OrbiMed Advisors, Millennium Management, and Pura Vida Investments 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 Ikarian Capital allocated the biggest weight to Milestone Pharmaceuticals Inc. (NASDAQ:MIST), around 0.92% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, dishing out 0.32 percent of its 13F equity portfolio to MIST.
As one would reasonably expect, some big names have jumped into Milestone Pharmaceuticals Inc. (NASDAQ:MIST) headfirst. RA Capital Management, managed by Peter Kolchinsky, established the most valuable position in Milestone Pharmaceuticals Inc. (NASDAQ:MIST). RA Capital Management had $17.7 million invested in the company at the end of the quarter. Neil Shahrestani’s Ikarian Capital also made a $12.8 million investment in the stock during the quarter. The other funds with brand new MIST positions are OrbiMed Advisors, Israel Englander’s Millennium Management, and Efrem Kamen’s Pura Vida Investments.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Milestone Pharmaceuticals Inc. (NASDAQ:MIST) but similarly valued. These stocks are Sequans Communications SA (NYSE:SQNS), Altus Midstream Company (NASDAQ:ALTM), Professional Holding Corp. (NASDAQ:PFHD), Eagle Bulk Shipping Inc. (NASDAQ:EGLE), Unity Biotechnology, Inc. (NASDAQ:UBX), Moneygram International Inc (NASDAQ:MGI), and Tilly’s Inc (NYSE:TLYS). This group of stocks’ market values are closest to MIST’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $36 million in MIST’s case. Tilly’s Inc (NYSE:TLYS) is the most popular stock in this table. On the other hand Altus Midstream Company (NASDAQ:ALTM) is the least popular one with only 2 bullish hedge fund positions. Milestone Pharmaceuticals Inc. (NASDAQ:MIST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MIST is 50.4. 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 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 November 27th and beat the market again by 16.1 percentage points. Unfortunately MIST wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MIST were disappointed as the stock returned -10.1% since the end of September (through 11/27) 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.