Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Celldex Therapeutics, Inc. (NASDAQ:CLDX)? The smart money sentiment can provide an answer to this question.
Celldex Therapeutics, Inc. (NASDAQ:CLDX) shareholders have witnessed an increase in hedge fund interest recently. Celldex Therapeutics, Inc. (NASDAQ:CLDX) was in 26 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CLDX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 go over the latest hedge fund action surrounding Celldex Therapeutics, Inc. (NASDAQ:CLDX).
Do Hedge Funds Think CLDX Is A Good Stock To Buy Now?
At Q1’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CLDX over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Celldex Therapeutics, Inc. (NASDAQ:CLDX) was held by Redmile Group, which reported holding $69.8 million worth of stock at the end of December. It was followed by Adage Capital Management with a $39.1 million position. Other investors bullish on the company included Vivo Capital, Acuta Capital Partners, and Opaleye Management. In terms of the portfolio weights assigned to each position Acuta Capital Partners allocated the biggest weight to Celldex Therapeutics, Inc. (NASDAQ:CLDX), around 7.56% of its 13F portfolio. Octagon Capital Advisors is also relatively very bullish on the stock, earmarking 4.36 percent of its 13F equity portfolio to CLDX.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, assembled the largest call position in Celldex Therapeutics, Inc. (NASDAQ:CLDX). Healthcor Management LP had $5.3 million invested in the company at the end of the quarter. Ken Greenberg and David Kim’s Ghost Tree Capital also made a $5.2 million investment in the stock during the quarter. The other funds with brand new CLDX positions are Prashanth Jayaram’s Tri Locum Partners, Efrem Kamen’s Pura Vida Investments, and Steve Cohen’s Point72 Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Celldex Therapeutics, Inc. (NASDAQ:CLDX) but similarly valued. These stocks are Horizon Bancorp, Inc. (NASDAQ:HBNC), Energy Fuels Inc (NYSE:UUUU), Photronics, Inc. (NASDAQ:PLAB), UMH Properties, Inc (NYSE:UMH), Forrester Research, Inc. (NASDAQ:FORR), Babcock & Wilcox Enterprises Inc (NYSE:BW), and Lands’ End, Inc. (NASDAQ:LE). This group of stocks’ market valuations are similar to CLDX’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $298 million in CLDX’s case. Babcock & Wilcox Enterprises Inc (NYSE:BW) is the most popular stock in this table. On the other hand UMH Properties, Inc (NYSE:UMH) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Celldex Therapeutics, Inc. (NASDAQ:CLDX) is more popular among hedge funds. Our overall hedge fund sentiment score for CLDX is 86. 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. 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 returned 24% in 2021 through July 9th but still managed to beat the market by 6.7 percentage points. Hedge funds were also right about betting on CLDX as the stock returned 57.3% since the end of March (through 7/9) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.