In this article we will check out the progression of hedge fund sentiment towards Millendo Therapeutics, Inc. (NASDAQ:MLND) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is MLND a good stock to buy now? Millendo Therapeutics, Inc. (NASDAQ:MLND) was in 9 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. MLND has seen an increase in hedge fund sentiment in recent months. There were 8 hedge funds in our database with MLND positions at the end of the second quarter. Our calculations also showed that MLND 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.
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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. Now let’s review the key hedge fund action surrounding Millendo Therapeutics, Inc. (NASDAQ:MLND).
Do Hedge Funds Think MLND Is A Good Stock To Buy Now?
At the end of September, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in MLND a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Great Point Partners held the most valuable stake in Millendo Therapeutics, Inc. (NASDAQ:MLND), which was worth $1.9 million at the end of the third quarter. On the second spot was Ghost Tree Capital which amassed $1.5 million worth of shares. Citadel Investment Group, Renaissance Technologies, and Winton Capital Management 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 Ghost Tree Capital allocated the biggest weight to Millendo Therapeutics, Inc. (NASDAQ:MLND), around 0.44% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, setting aside 0.17 percent of its 13F equity portfolio to MLND.
Now, key money managers have been driving this bullishness. Ghost Tree Capital, managed by Ken Greenberg and David Kim, created the most valuable position in Millendo Therapeutics, Inc. (NASDAQ:MLND). Ghost Tree Capital had $1.5 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also initiated a $0.3 million position during the quarter. The only other fund with a brand new MLND position is Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Millendo Therapeutics, Inc. (NASDAQ:MLND) but similarly valued. We will take a look at BBQ Holdings, Inc. (NASDAQ:BBQ), Volt Information Sciences, Inc. (NYSE:VOLT), Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), NovaBay Pharmaceuticals, Inc. (NYSE:NBY), AgeX Therapeutics, Inc. (NYSE:AGE), FreightCar America, Inc. (NASDAQ:RAIL), and Ossen Innovation Co Ltd (NASDAQ:OSN). This group of stocks’ market caps match MLND’s market cap.
|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 3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $6 million in MLND’s case. FreightCar America, Inc. (NASDAQ:RAIL) is the most popular stock in this table. On the other hand Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Millendo Therapeutics, Inc. (NASDAQ:MLND) is more popular among hedge funds. Our overall hedge fund sentiment score for MLND is 76.8. 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 returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on MLND as the stock returned 20.2% since the end of September (through 12/8) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.