At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Oncternal Therapeutics, Inc. (NASDAQ:ONCT) makes for a good investment right now.
Is Oncternal Therapeutics (ONCT) a good stock to buy now? ONCT has seen an increase in enthusiasm from smart money recently. Oncternal Therapeutics, Inc. (NASDAQ:ONCT) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 9. There were 3 hedge funds in our database with ONCT holdings at the end of June. Our calculations also showed that ONCT 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely 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 take a gander at the recent hedge fund action encompassing Oncternal Therapeutics, Inc. (NASDAQ:ONCT).
How are hedge funds trading Oncternal Therapeutics, Inc. (NASDAQ:ONCT)?
Heading into the fourth quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in ONCT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Armistice Capital held the most valuable stake in Oncternal Therapeutics, Inc. (NASDAQ:ONCT), which was worth $2.2 million at the end of the third quarter. On the second spot was Nantahala Capital Management which amassed $2 million worth of shares. Opaleye Management, Renaissance Technologies, and Millennium 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 Armistice Capital allocated the biggest weight to Oncternal Therapeutics, Inc. (NASDAQ:ONCT), around 0.08% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, earmarking 0.06 percent of its 13F equity portfolio to ONCT.
Now, key hedge funds were breaking ground themselves. Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, initiated the most valuable position in Oncternal Therapeutics, Inc. (NASDAQ:ONCT). Nantahala Capital Management had $2 million invested in the company at the end of the quarter. James A. Silverman’s Opaleye Management also made a $0.3 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Oncternal Therapeutics, Inc. (NASDAQ:ONCT) but similarly valued. These stocks are FSD Pharma Inc. (NASDAQ:HUGE), Air Industries Group (NYSE:AIRI), Kaixin Auto Holdings (NASDAQ:KXIN), CSP Inc. (NASDAQ:CSPI), Fuling Global Inc. (NASDAQ:FORK), China Jo Jo Drugstores Inc (NASDAQ:CJJD), and Nuverra Environmental Solutions Inc (NYSE:NES). This group of stocks’ market values match ONCT’s market value.
|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 2 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $5 million in ONCT’s case. China Jo Jo Drugstores Inc (NASDAQ:CJJD) is the most popular stock in this table. On the other hand FSD Pharma Inc. (NASDAQ:HUGE) is the least popular one with only 1 bullish hedge fund positions. Oncternal Therapeutics, Inc. (NASDAQ:ONCT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ONCT is 63.7. 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 November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on ONCT as the stock returned 57.1% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.