The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Lantheus Holdings Inc (NASDAQ:LNTH) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Lantheus Holdings Inc (NASDAQ:LNTH) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 20 hedge funds’ portfolios at the end of June. Our calculations also showed that LNTH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). 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 ePlus Inc. (NASDAQ:PLUS), e.l.f. Beauty, Inc. (NYSE:ELF), and Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) to gather more data points. Our calculations also showed that LNTH isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Justin John Ferayorni of Tamarack Capital Management
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 are checking out this junior gold mining stock and 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. 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 to get excerpts of these letters in your inbox. With all of this in mind we’re going to view the fresh hedge fund action encompassing Lantheus Holdings Inc (NASDAQ:LNTH).
How are hedge funds trading Lantheus Holdings Inc (NASDAQ:LNTH)?
At Q2’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in LNTH a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Armistice Capital held the most valuable stake in Lantheus Holdings Inc (NASDAQ:LNTH), which was worth $51.8 million at the end of the third quarter. On the second spot was Farallon Capital which amassed $37.7 million worth of shares. Tamarack Capital Management, Arrowstreet Capital, and Renaissance Technologies 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 Tamarack Capital Management allocated the biggest weight to Lantheus Holdings Inc (NASDAQ:LNTH), around 3.78% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, designating 2.27 percent of its 13F equity portfolio to LNTH.
Seeing as Lantheus Holdings Inc (NASDAQ:LNTH) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds that decided to sell off their positions entirely in the second quarter. Interestingly, C. Jonathan Gattman’s Cloverdale Capital Management said goodbye to the biggest investment of all the hedgies watched by Insider Monkey, totaling about $11 million in stock. Mika Toikka’s fund, AlphaCrest Capital Management, also cut its stock, about $0.7 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Lantheus Holdings Inc (NASDAQ:LNTH). We will take a look at ePlus Inc. (NASDAQ:PLUS), e.l.f. Beauty, Inc. (NYSE:ELF), Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT), Provident Financial Services, Inc. (NYSE:PFS), AudioCodes Ltd. (NASDAQ:AUDC), Grupo Simec S.A.B. de C.V. (NYSE:SIM), and FARO Technologies, Inc. (NASDAQ:FARO). All of these stocks’ market caps resemble LNTH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLUS | 16 | 43799 | 3 |
| ELF | 22 | 236778 | 2 |
| PHAT | 5 | 341507 | -1 |
| PFS | 10 | 29459 | -2 |
| AUDC | 12 | 38007 | 2 |
| SIM | 1 | 1571 | 0 |
| FARO | 16 | 141391 | 4 |
| Average | 11.7 | 118930 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.7 hedge funds with bullish positions and the average amount invested in these stocks was $119 million. That figure was $141 million in LNTH’s case. e.l.f. Beauty, Inc. (NYSE:ELF) is the most popular stock in this table. On the other hand Grupo Simec S.A.B. de C.V. (NYSE:SIM) is the least popular one with only 1 bullish hedge fund positions. Lantheus Holdings Inc (NASDAQ:LNTH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LNTH is 33.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately LNTH wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on LNTH were disappointed as the stock returned -11.4% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
