We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Viate Pharmaceuticals Inc (NASDAQ:VTAE).
Viate Pharmaceuticals Inc (NASDAQ:VTAE)’s shares plunged by 20% in the third quarter, but the number of bullish hedge fund bets went up by six and a total of 15 funds among those we track reported long positions in the biotech company as of the end of September. At the end of this article we will also compare VTAE to other stocks, including Aquinox Pharmaceuticals Inc (NASDAQ:AQXP), Ares Dynamic Credit Allocation Fund Inc (NYSE:ARDC), and McEwen Mining Inc (NYSE:MUX) to get a better sense of its popularity.
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Follow Vitae Pharmaceuticals Inc (NASDAQ:VTAE)
To most market participants, hedge funds are assumed to be slow, outdated investment tools of the past. While there are more than 8000 funds trading at present, Our researchers choose to focus on the bigwigs of this group, approximately 700 funds. Most estimates calculate that this group of people handle bulk of all hedge funds’ total asset base, and by tailing their best equity investments, Insider Monkey has unearthed numerous investment strategies that have historically exceeded Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, let’s take a look at the fresh action regarding Viate Pharmaceuticals Inc (NASDAQ:VTAE).
Hedge fund activity in Viate Pharmaceuticals Inc (NASDAQ:VTAE)
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 67% from one quarter earlier. Among these investors, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the most valuable position in Viate Pharmaceuticals Inc (NASDAQ:VTAE). BVF Inc has a $26.2 million position in the stock, comprising 5.3% of its 13F portfolio. The second most bullish fund is Phill Gross and Robert Atchinson’s Adage Capital Management, with a $15.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions encompass Israel Englander’s Millennium Management, Steve Cohen’s Point72 Asset Management, and Samuel Isaly’s OrbiMed Advisors.
Consequently, some big names have jumped into Viate Pharmaceuticals Inc (NASDAQ:VTAE) headfirst. OrbiMed Advisors established the most valuable position in Viate Pharmaceuticals Inc (NASDAQ:VTAE). OrbiMed Advisors had $4 million invested in the company at the end of the quarter. Peter Kolchinsky’s RA Capital Management also made a $3.5 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Nathan Fischel’s DAFNA Capital Management, and Brad Farber’s Atika Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Viate Pharmaceuticals Inc (NASDAQ:VTAE) but similarly valued. We will take a look at Aquinox Pharmaceuticals Inc (NASDAQ:AQXP), Ares Dynamic Credit Allocation Fund Inc (NYSE:ARDC), McEwen Mining Inc (NYSE:MUX), and United Community Financial Corp (NASDAQ:UCFC). All of these stocks’ market caps match VTAE’s market cap.
|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 9 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $75 million in VTAE’s case. Aquinox Pharmaceuticals Inc (NASDAQ:AQXP) is the most popular stock in this table. On the other hand, Ares Dynamic Credit Allocation Fund Inc (NYSE:ARDC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Viate Pharmaceuticals Inc (NASDAQ:VTAE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.