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 Novus Therapeutics, Inc. (NASDAQ:NVUS).
Is Novus Therapeutics (NVUS) a good stock to buy now? NVUS shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of September. Our calculations also showed that NVUS 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). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AEterna Zentaris Inc. (NASDAQ:AEZS), United States Antimony Corporation (NYSE:UAMY), and CPS Technologies Corp. (NASDAQ:CPSH) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a multitude of tools investors have at their disposal to value stocks. Two of the most under-the-radar tools are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the elite fund managers can outperform the S&P 500 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 go over the fresh hedge fund action encompassing Novus Therapeutics, Inc. (NASDAQ:NVUS).
How have hedgies been trading Novus Therapeutics, Inc. (NASDAQ:NVUS)?
At the end of September, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NVUS over the last 21 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the number one position in Novus Therapeutics, Inc. (NASDAQ:NVUS). Biotechnology Value Fund / BVF Inc has a $3.3 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by OrbiMed Advisors, managed by Samuel Isaly, which holds a $3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions consist of Renaissance Technologies, Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) and . In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Novus Therapeutics, Inc. (NASDAQ:NVUS), around 0.18% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to NVUS.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Prelude Capital (previously Springbok Capital)).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Novus Therapeutics, Inc. (NASDAQ:NVUS) but similarly valued. We will take a look at AEterna Zentaris Inc. (NASDAQ:AEZS), United States Antimony Corporation (NYSE:UAMY), CPS Technologies Corp. (NASDAQ:CPSH), SIFCO Industries, Inc. (NYSE:SIF), Bonso Electronics International Inc. (NASDAQ:BNSO), Ashford Hospitality Trust, Inc. (NYSE:AHT), and AIkido Pharma Inc. (NASDAQ:AIKI). This group of stocks’ market values match NVUS’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 2 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $7 million in NVUS’s case. United States Antimony Corporation (NYSE:UAMY) is the most popular stock in this table. On the other hand AEterna Zentaris Inc. (NASDAQ:AEZS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Novus Therapeutics, Inc. (NASDAQ:NVUS) is more popular among hedge funds. Our overall hedge fund sentiment score for NVUS is 79. 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 30.7% in 2020 through November 27th but still managed to beat the market by 16.1 percentage points. Hedge funds were also right about betting on NVUS as the stock returned 47.9% since the end of September (through 11/27) 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.
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Disclosure: None. This article was originally published at Insider Monkey.