While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Marinus Pharmaceuticals Inc (NASDAQ:MRNS).
Marinus Pharmaceuticals Inc (NASDAQ:MRNS) investors should pay attention to a decrease in support from the world’s most elite money managers recently. Marinus Pharmaceuticals Inc (NASDAQ:MRNS) was in 16 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 18. There were 17 hedge funds in our database with MRNS positions at the end of the fourth quarter. Our calculations also showed that MRNS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the 21st century investor’s toolkit there are many metrics stock traders can use to analyze publicly traded companies. Some of the most useful metrics are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the elite investment managers can trounce the market by a very impressive amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Now let’s take a peek at the key hedge fund action regarding Marinus Pharmaceuticals Inc (NASDAQ:MRNS).
Do Hedge Funds Think MRNS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in MRNS 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.
The largest stake in Marinus Pharmaceuticals Inc (NASDAQ:MRNS) was held by Lion Point, which reported holding $56 million worth of stock at the end of December. It was followed by Avoro Capital Advisors (venBio Select Advisor) with a $50.1 million position. Other investors bullish on the company included 683 Capital Partners, Suvretta Capital Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position Lion Point allocated the biggest weight to Marinus Pharmaceuticals Inc (NASDAQ:MRNS), around 10.19% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, setting aside 1.55 percent of its 13F equity portfolio to MRNS.
Because Marinus Pharmaceuticals Inc (NASDAQ:MRNS) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedge funds who sold off their positions entirely last quarter. It’s worth mentioning that Peter Kolchinsky’s RA Capital Management cut the biggest stake of the 750 funds tracked by Insider Monkey, comprising close to $15.9 million in stock. Jonathan Barrett and Paul Segal’s fund, Luminus Management, also dumped its stock, about $4.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Marinus Pharmaceuticals Inc (NASDAQ:MRNS) but similarly valued. These stocks are Atomera Incorporated (NASDAQ:ATOM), Aldeyra Therapeutics Inc (NASDAQ:ALDX), HighPeak Energy, Inc. (NASDAQ:HPK), Hess Midstream LP (NYSE:HESM), Duluth Holdings Inc. (NASDAQ:DLTH), Earthstone Energy, Inc. (NYSE:ESTE), and Banco BBVA Argentina S.A. (NYSE:BBAR). All of these stocks’ market caps are closest to MRNS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 8.3 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $213 million in MRNS’s case. Aldeyra Therapeutics Inc (NASDAQ:ALDX) is the most popular stock in this table. On the other hand Banco BBVA Argentina S.A. (NYSE:BBAR) is the least popular one with only 4 bullish hedge fund positions. Marinus Pharmaceuticals Inc (NASDAQ:MRNS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MRNS is 76.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately MRNS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MRNS were disappointed as the stock returned 4% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.