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TG Therapeutics Inc (TGTX): Hedge Funds In Wait-and-See Mode

Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That’s why we weren’t surprised when hedge funds’ top 20 large-cap stock picks generated a return of 24.4% during the first 9 months of 2019 and outperformed the broader market benchmark by 4 percentage points.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.

Hedge fund interest in TG Therapeutics Inc (NASDAQ:TGTX) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Tivity Health, Inc. (NASDAQ:TVTY), Myovant Sciences Ltd. (NYSE:MYOV), and Pitney Bowes Inc. (NYSE:PBI) to gather more data points. Our calculations also showed that TGTX isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

At the moment there are plenty of formulas market participants use to analyze their holdings. A couple of the less known formulas are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can outperform the broader indices by a significant margin (see the details here).

Peter Kolchinsky

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a glance at the latest hedge fund action encompassing TG Therapeutics Inc (NASDAQ:TGTX).

Hedge fund activity in TG Therapeutics Inc (NASDAQ:TGTX)

At the end of the second quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TGTX over the last 16 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

TGTX_oct2019

Among these funds, RA Capital Management held the most valuable stake in TG Therapeutics Inc (NASDAQ:TGTX), which was worth $59.5 million at the end of the second quarter. On the second spot was Millennium Management which amassed $46.4 million worth of shares. Moreover, Bridger Management, Opaleye Management, and Camber Capital Management were also bullish on TG Therapeutics Inc (NASDAQ:TGTX), allocating a large percentage of their portfolios to this stock.

Seeing as TG Therapeutics Inc (NASDAQ:TGTX) has faced a decline in interest from the smart money, logic holds that there were a few hedgies who sold off their full holdings in the second quarter. At the top of the heap, Israel Englander’s Millennium Management sold off the biggest investment of the “upper crust” of funds watched by Insider Monkey, valued at about $8.2 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund sold off about $0.6 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to TG Therapeutics Inc (NASDAQ:TGTX). These stocks are Tivity Health, Inc. (NASDAQ:TVTY), Myovant Sciences Ltd. (NYSE:MYOV), Pitney Bowes Inc. (NYSE:PBI), and ConnectOne Bancorp Inc (NASDAQ:CNOB). This group of stocks’ market caps are closest to TGTX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TVTY 16 188253 -4
MYOV 8 80166 2
PBI 18 68134 -6
CNOB 9 44949 -1
Average 12.75 95376 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $187 million in TGTX’s case. Pitney Bowes Inc. (NYSE:PBI) is the most popular stock in this table. On the other hand Myovant Sciences Ltd. (NYSE:MYOV) is the least popular one with only 8 bullish hedge fund positions. TG Therapeutics Inc (NASDAQ:TGTX) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately TGTX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TGTX were disappointed as the stock returned -35.1% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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

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