After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards MannKind Corporation (NASDAQ:MNKD).
Is MNKD a good stock to buy now? MannKind Corporation (NASDAQ:MNKD) investors should pay attention to a decrease in hedge fund interest recently. MannKind Corporation (NASDAQ:MNKD) was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. Our calculations also showed that MNKD 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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 view the recent hedge fund action surrounding MannKind Corporation (NASDAQ:MNKD).
What have hedge funds been doing with MannKind Corporation (NASDAQ:MNKD)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -46% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in MNKD over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John Overdeck and David Siegel’s Two Sigma Advisors has the most valuable position in MannKind Corporation (NASDAQ:MNKD), worth close to $1.6 million, accounting for less than 0.1%% of its total 13F portfolio. On Two Sigma Advisors’s heels is Matt Sirovich and Jeremy Mindich of Scopia Capital, with a $1.3 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers with similar optimism contain Ken Griffin’s Citadel Investment Group, Renaissance Technologies and Greg Martinez’s Parkman Healthcare Partners. In terms of the portfolio weights assigned to each position Parkman Healthcare Partners allocated the biggest weight to MannKind Corporation (NASDAQ:MNKD), around 0.17% of its 13F portfolio. Scopia Capital is also relatively very bullish on the stock, earmarking 0.15 percent of its 13F equity portfolio to MNKD.
Because MannKind Corporation (NASDAQ:MNKD) has experienced a decline in interest from hedge fund managers, logic holds that there exists a select few funds who were dropping their positions entirely in the third quarter. Intriguingly, Israel Englander’s Millennium Management dumped the biggest investment of all the hedgies tracked by Insider Monkey, worth about $4.9 million in stock, and Bruce Kovner’s Caxton Associates LP was right behind this move, as the fund dumped about $0.2 million worth. These moves are interesting, as total hedge fund interest fell by 6 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to MannKind Corporation (NASDAQ:MNKD). We will take a look at First Financial Corp (NASDAQ:THFF), Global Cord Blood Corp (NYSE:CO), TherapeuticsMD Inc (NASDAQ:TXMD), Harpoon Therapeutics, Inc. (NASDAQ:HARP), Alphatec Holdings Inc (NASDAQ:ATEC), Star Group L.P. (NYSE:SGU), and Tribune Publishing Company (NASDAQ:TPCO). This group of stocks’ market valuations resemble MNKD’s market valuation.
|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 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $6 million in MNKD’s case. Alphatec Holdings Inc (NASDAQ:ATEC) is the most popular stock in this table. On the other hand Global Cord Blood Corp (NYSE:CO) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks MannKind Corporation (NASDAQ:MNKD) is even less popular than CO. Our overall hedge fund sentiment score for MNKD is 15.2. 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. Hedge funds clearly dropped the ball on MNKD as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on MNKD as the stock returned 53.2% since Q3 (through December 2nd) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.