Is TGTX A Good Stock To Buy According To Hedge Funds?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is TG Therapeutics Inc (NASDAQ:TGTX), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is TGTX a good stock to buy? TG Therapeutics Inc (NASDAQ:TGTX) was in 30 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 34. TGTX has experienced a decrease in hedge fund interest of late. There were 34 hedge funds in our database with TGTX positions at the end of the second quarter. Our calculations also showed that TGTX 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 eyes of most investors, hedge funds are viewed as slow, old investment tools of the past. While there are greater than 8000 funds with their doors open today, Our experts choose to focus on the elite of this club, around 850 funds. These money managers control the lion’s share of the hedge fund industry’s total asset base, and by shadowing their unrivaled stock picks, Insider Monkey has revealed a few investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Peter Kolchinsky of RA Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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 review the recent hedge fund action encompassing TG Therapeutics Inc (NASDAQ:TGTX).

Do Hedge Funds Think TGTX Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TGTX over the last 21 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Among these funds, RA Capital Management held the most valuable stake in TG Therapeutics Inc (NASDAQ:TGTX), which was worth $236.2 million at the end of the third quarter. On the second spot was Maverick Capital which amassed $117.5 million worth of shares. Alkeon Capital Management, Logos Capital, and Great Point Partners 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 Lion Point allocated the biggest weight to TG Therapeutics Inc (NASDAQ:TGTX), around 7.79% of its 13F portfolio. Logos Capital is also relatively very bullish on the stock, dishing out 6.18 percent of its 13F equity portfolio to TGTX.

Since TG Therapeutics Inc (NASDAQ:TGTX) has faced bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of hedge funds who sold off their full holdings heading into Q4. It’s worth mentioning that Farallon Capital cut the biggest investment of all the hedgies watched by Insider Monkey, valued at about $29.2 million in stock, and Efrem Kamen’s Pura Vida Investments was right behind this move, as the fund dumped about $2.8 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TG Therapeutics Inc (NASDAQ:TGTX) but similarly valued. These stocks are Global Blood Therapeutics Inc (NASDAQ:GBT), Parsons Corporation (NYSE:PSN), Vertex, Inc. (NASDAQ:VERX), Watts Water Technologies Inc (NYSE:WTS), Cloudera, Inc. (NYSE:CLDR), PS Business Parks Inc (NYSE:PSB), and Hudson Pacific Properties Inc (NYSE:HPP). This group of stocks’ market valuations are similar to TGTX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GBT 29 662293 -2
PSN 16 84915 1
VERX 15 97006 15
WTS 18 277904 -7
CLDR 31 768674 -2
PSB 17 83110 -3
HPP 17 311969 -7
Average 20.4 326553 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $327 million. That figure was $719 million in TGTX’s case. Cloudera, Inc. (NYSE:CLDR) is the most popular stock in this table. On the other hand Vertex, Inc. (NASDAQ:VERX) is the least popular one with only 15 bullish hedge fund positions. TG Therapeutics Inc (NASDAQ:TGTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TGTX is 74.3. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on TGTX as the stock returned 101.8% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Follow Tg Therapeutics Inc. (NASDAQ:TGTX)

Disclosure: None. This article was originally published at Insider Monkey.