It has been an excellent day for Neuralstem, Inc. (NYSEMKT:CUR)l, as its shares started trading on a higher note with a 5.1% increase in its share price. The biopharmaceutical company works on the development of medicines for treating diseases related to the central nervous system. As per a recent press release from Neuralstem, the poster “Human Neural Stem Cells Expressing IGF-1: A Novel Cellular Therapy for Alzheimer’s Disease” was presented and discussed at the annual meeting of the International Society for Stem Cell Research yesterday. The presentation involved the release of data concerning experiments using HK532-IGF-1 on mice suffering from an animal variation of Alzheimer’s disease. The results were positive, with better cognitive learning response and memory consolidation among the mice.
The shares of Neuralstem, Inc. (NYSEMKT:CUR) were up 11% in the pre-market trading sessions primarily because of positive clinical results. Neuralstem is an interesting company to lookout for primarily because of its positive clinical results over the last couple of years including NSI-189 compound, which seems to be effective against major depressive disorders. NSI-189 has already passed FDA phase 1a and 1b trials and the company is planning to launch phase-II clinical trials in 2015.
In case of biopharmaceutical companies, a major clinical breakthrough or test result is sufficient to boost its share prices. Among the hedge funds that we track, three investment managers have stock positions in Neuralstem, Inc. (NYSEMKT:CUR) indicating confidence in the company. Ken Griffin’s Citadel Investment Group is by far the largest stockholder of the company and it has improved its stake further in the quarter ending on March 31, 2015. The number of hedge funds with positions in the company is similar to the previous quarter.
We track hedge funds and prominent investors because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 50 most popular large-cap stocks among hedge funds had a monthly alpha of about 6 basis points per month between 1999 and 2012; however the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated 10 percentage points of alpha per year simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 and these stocks beat the market by 84 percentage points (142% return vs. S&P 500’s 58% gain) over the last 33 months (check out our research).
In addition to the hedge fund sentiment, it helps to consider the insider activity of any given company. Neuralstem, Inc. (NYSEMKT:CUR) has not witnessed any insider sale or purchase in the last six months.