Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
TG Therapeutics Inc (NASDAQ:TGTX)’s stock has lost more than 30% since the beginning of the year and it has also seen a decrease in hedge fund sentiment recently. TGTX was in 10 hedge funds’ portfolios at the end of September, compared to 13 funds in our database with TGTX holdings at the end of the previous quarter. 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 National Interstate Corporation (NASDAQ:NATL), Green Brick Partners Inc (NASDAQ:GRBK), and Western Asset Mortgage Capital Corp (NYSE:WMC) to gather more data points.
In the 21st century investor’s toolkit there are several signals stock market investors can use to size up stocks. A pair of the less known signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the best investment managers can beat the market by a significant amount (see the details here).
Keeping this in mind, let’s take a peek at the recent action encompassing TG Therapeutics Inc (NASDAQ:TGTX).
What have hedge funds been doing with TG Therapeutics Inc (NASDAQ:TGTX)?
Heading into Q4, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a a decline of 23% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Peter Kolchinsky’s RA Capital Management has the number one position in TG Therapeutics Inc (NASDAQ:TGTX), worth close to $31.5 million, amounting to 4.5% of its total 13F portfolio. The second largest stake is held by Bridger Management, led by Roberto Mignone, holding a $30.8 million position; 2.1% of its 13F portfolio is allocated to the company. The remaining members of the smart money that hold long positions encompass Julian Baker and Felix Baker’s Baker Bros. Advisors, Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, and Clifford Fox’s Columbus Circle Investors.
Since TG Therapeutics Inc (NASDAQ:TGTX) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there were a few funds who were dropping their positions entirely in the third quarter. At the top of the heap, D. E. Shaw’s D E Shaw dumped the biggest position of the “upper crust” of funds tracked by Insider Monkey, comprising close to $1.3 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $0.6 million worth.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as TG Therapeutics Inc (NASDAQ:TGTX) but similarly valued. We will take a look at National Interstate Corporation (NASDAQ:NATL), Green Brick Partners Inc (NASDAQ:GRBK), Western Asset Mortgage Capital Corp (NYSE:WMC), and Getty Realty Corp. (NYSE:GTY). This group of stocks’ market values are closest to TGTX’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $110 million. That figure was $113 million in TGTX’s case. Green Brick Partners Inc (NASDAQ:GRBK) is the most popular stock in this table with a total of 10 funds reporting long positions, while Western Asset Mortgage Capital Corp (NYSE:WMC) is the least popular one with only 4 bullish hedge fund positions. TG Therapeutics Inc (NASDAQ:TGTX) registers the same level of interest as Green Brick Partners, which may suggest that the stock is worth taking a closer look at and maybe initiating a long position.