The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Tenax Therapeutics Inc (NASDAQ:TENX).
Tenax Therapeutics Inc (NASDAQ:TENX) 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 the third quarter of 2020. Our calculations also showed that TENX 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). At the end of this article we will also compare TENX to other stocks including Titan Pharmaceuticals, Inc. (NASDAQ:TTNP), Medley Management Inc (NYSE:MDLY), and 1347 Property Insurance Holdings, Inc. (NASDAQ:PIH) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
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 10 most profitable companies in the world 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. Keeping this in mind let’s view the recent hedge fund action regarding Tenax Therapeutics Inc (NASDAQ:TENX).
How have hedgies been trading Tenax Therapeutics Inc (NASDAQ:TENX)?
Heading into the fourth quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TENX over the last 21 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Armistice Capital, managed by Steven Boyd, holds the biggest position in Tenax Therapeutics Inc (NASDAQ:TENX). Armistice Capital has a $3.1 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, led by Jim Simons (founder), holding a $0.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions consist of Kevin C. Tang’s Tang Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Tang Capital Management allocated the biggest weight to Tenax Therapeutics Inc (NASDAQ:TENX), around 0.13% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, setting aside 0.11 percent of its 13F equity portfolio to TENX.
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 Armistice Capital).
Let’s now review hedge fund activity in other stocks similar to Tenax Therapeutics Inc (NASDAQ:TENX). These stocks are Titan Pharmaceuticals, Inc. (NASDAQ:TTNP), Medley Management Inc (NYSE:MDLY), 1347 Property Insurance Holdings, Inc. (NASDAQ:PIH), MMTec, Inc. (NASDAQ:MTC), Orbital Energy Group, Inc. (NASDAQ:OEG), Ocean Power Technologies Inc (NASDAQ:OPTT), and Mediaco Holding Inc. (NASDAQ:MDIA). This group of stocks’ market caps match TENX’s market cap.
|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 1.6 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $5 million in TENX’s case. Titan Pharmaceuticals, Inc. (NASDAQ:TTNP) is the most popular stock in this table. On the other hand Medley Management Inc (NYSE:MDLY) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Tenax Therapeutics Inc (NASDAQ:TENX) is more popular among hedge funds. Our overall hedge fund sentiment score for TENX is 67. 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. Unfortunately TENX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TENX were disappointed as the stock returned -27.3% since the end of the third quarter (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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.