After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Protagonist Therapeutics, Inc. (NASDAQ:PTGX).
Is Protagonist Therapeutics, Inc. (NASDAQ:PTGX) a cheap stock to buy now? The smart money is getting less bullish. The number of bullish hedge fund positions fell by 1 lately. Our calculations also showed that PTGX isn’t among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a look at the key hedge fund action surrounding Protagonist Therapeutics, Inc. (NASDAQ:PTGX).
Hedge fund activity in Protagonist Therapeutics, Inc. (NASDAQ:PTGX)
At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in PTGX at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Biotechnology Value Fund / BVF Inc was the largest shareholder of Protagonist Therapeutics, Inc. (NASDAQ:PTGX), with a stake worth $26.9 million reported as of the end of September. Trailing Biotechnology Value Fund / BVF Inc was Farallon Capital, which amassed a stake valued at $23.1 million. Perceptive Advisors, Millennium Management, and Great Point Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Protagonist Therapeutics, Inc. (NASDAQ:PTGX) has faced a decline in interest from the smart money, it’s safe to say that there exists a select few fund managers who were dropping their entire stakes heading into Q3. Intriguingly, Phill Gross and Robert Atchinson’s Adage Capital Management cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, valued at about $3.4 million in stock, and Bihua Chen’s Cormorant Asset Management was right behind this move, as the fund dumped about $2.6 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 funds heading into Q3.
Let’s also examine hedge fund activity in other stocks similar to Protagonist Therapeutics, Inc. (NASDAQ:PTGX). These stocks are Rockwell Medical Inc (NASDAQ:RMTI), Stellus Capital Investment Corporation (NYSE:SCM), The Gabelli Healthcare & Wellness Trust (NYSE:GRX), and Thunder Bridge Acquisition, Ltd. (NASDAQ:TBRG). This group of stocks’ market values match PTGX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RMTI | 2 | 324 | 0 |
| SCM | 2 | 4678 | 1 |
| GRX | 3 | 5332 | 0 |
| TBRG | 8 | 36659 | -3 |
| Average | 3.75 | 11748 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.75 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $92 million in PTGX’s case. Thunder Bridge Acquisition, Ltd. (NASDAQ:TBRG) is the most popular stock in this table. On the other hand Rockwell Medical Inc (NASDAQ:RMTI) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Protagonist Therapeutics, Inc. (NASDAQ:PTGX) 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.
Disclosure: None. This article was originally published at Insider Monkey.
