As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Kadmon Holdings, Inc. (NASDAQ:KDMN).
Is Kadmon Holdings, Inc. (NASDAQ:KDMN) a first-rate investment right now? Money managers were getting less bullish. The number of long hedge fund bets dropped by 7 in recent months. Kadmon Holdings, Inc. (NASDAQ:KDMN) was in 24 hedge funds’ portfolios at the end of March. The all time high for this statistic is 31. Our calculations also showed that KDMN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 31 hedge funds in our database with KDMN holdings at the end of December.
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Do Hedge Funds Think KDMN Is A Good Stock To Buy Now?
At the end of March, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards KDMN over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Perceptive Advisors was the largest shareholder of Kadmon Holdings, Inc. (NASDAQ:KDMN), with a stake worth $61.1 million reported as of the end of March. Trailing Perceptive Advisors was Point72 Asset Management, which amassed a stake valued at $45.8 million. Third Point, Laurion Capital Management, and Vivo Capital 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 Great Point Partners allocated the biggest weight to Kadmon Holdings, Inc. (NASDAQ:KDMN), around 3.82% of its 13F portfolio. Dorset Management is also relatively very bullish on the stock, earmarking 1.27 percent of its 13F equity portfolio to KDMN.
Due to the fact that Kadmon Holdings, Inc. (NASDAQ:KDMN) has faced a decline in interest from hedge fund managers, we can see that there were a few hedge funds that slashed their entire stakes by the end of the first quarter. At the top of the heap, Mitchell Blutt’s Consonance Capital Management dumped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $30.5 million in stock, and Ting Jia’s Octagon Capital Advisors was right behind this move, as the fund dumped about $1.8 million worth. These transactions are important to note, as total hedge fund interest dropped by 7 funds by the end of the first quarter.
Let’s go over hedge fund activity in other stocks similar to Kadmon Holdings, Inc. (NASDAQ:KDMN). These stocks are GAN Limited (NASDAQ:GAN), iHuman Inc. (NYSE:IH), Zepp Health Corporation (NYSE:ZEPP), Rafael Holdings, Inc. (NYSE:RFL), Cass Information Systems, Inc. (NASDAQ:CASS), Provention Bio, Inc. (NASDAQ:PRVB), and Aemetis, Inc (NASDAQ:AMTX). This group of stocks’ market values resemble KDMN’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.6 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $286 million in KDMN’s case. Aemetis, Inc (NASDAQ:AMTX) is the most popular stock in this table. On the other hand iHuman Inc. (NYSE:IH) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Kadmon Holdings, Inc. (NASDAQ:KDMN) is more popular among hedge funds. Our overall hedge fund sentiment score for KDMN is 71.2. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on KDMN, though not to the same extent, as the stock returned 10% since the end of March (through July 16th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.