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NeuBase Therapeutics, Inc. (NBSE): Hedge Funds Dropped The Ball?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 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 September 30th. In this article we look at what those investors think of NeuBase Therapeutics, Inc. (NASDAQ:NBSE).

NeuBase Therapeutics, Inc. (NASDAQ:NBSE) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 2 hedge funds’ portfolios at the end of the third quarter of 2019. At the end of this article we will also compare NBSE to other stocks including Randolph Bancorp, Inc. (NASDAQ:RNDB), Portman Ridge Finance Corporation (NASDAQ:PTMN), and MSB Financial Corp. (NASDAQ:MSBF) to get a better sense of its popularity.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Greenlight Capital

We’re going to take a gander at the new hedge fund action encompassing NeuBase Therapeutics, Inc. (NASDAQ:NBSE).

How are hedge funds trading NeuBase Therapeutics, Inc. (NASDAQ:NBSE)?

Heading into the fourth quarter of 2019, a total of 2 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NBSE over the last 17 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

NBSE_nov2019

Among these funds, Greenlight Capital held the most valuable stake in NeuBase Therapeutics, Inc. (NASDAQ:NBSE), which was worth $7.7 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $1.3 million worth of shares. We view hedge fund activity in the stock unfavorable. Overall hedge fund sentiment towards the stock has been trending downward since 2015 when there were 6 hedge funds with bullish positions.

Let’s now take a look at hedge fund activity in other stocks similar to NeuBase Therapeutics, Inc. (NASDAQ:NBSE). We will take a look at Randolph Bancorp, Inc. (NASDAQ:RNDB), Portman Ridge Finance Corporation (NASDAQ:PTMN), MSB Financial Corp. (NASDAQ:MSBF), and Jerash Holdings (US), Inc. (NASDAQ:JRSH). This group of stocks’ market values resemble NBSE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RNDB 2 6691 0
PTMN 3 1093 -1
MSBF 3 13893 0
JRSH 3 1469 2
Average 2.75 5787 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.75 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $9 million in NBSE’s case. Portman Ridge Finance Corporation (NASDAQ:PTMN) is the most popular stock in this table. On the other hand Randolph Bancorp, Inc. (NASDAQ:RNDB) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks NeuBase Therapeutics, Inc. (NASDAQ:NBSE) is even less popular than RNDB. Hedge funds clearly dropped the ball on NBSE as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. A small number of hedge funds were also right about betting on NBSE as the stock returned 28.9% during the fourth quarter (through 11/22) and outperformed the market by an even larger margin.

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

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