Where Do Hedge Funds Stand On Larimar Therapeutics, Inc. (LRMR)?

The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Larimar Therapeutics, Inc. (NASDAQ:LRMR).

Is Larimar Therapeutics, Inc. (NASDAQ:LRMR) going to take off soon? The smart money was getting more optimistic. The number of bullish hedge fund positions inched up by 3 in recent months. Larimar Therapeutics, Inc. (NASDAQ:LRMR) was in 20 hedge funds’ portfolios at the end of March. The all time high for this statistic is 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LRMR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

According to most traders, hedge funds are viewed as underperforming, old financial vehicles of years past. While there are over 8000 funds with their doors open at the moment, We look at the bigwigs of this group, around 850 funds. These money managers direct the majority of the smart money’s total capital, and by tracking their matchless equity investments, Insider Monkey has identified a few investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. 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 .

James Flynn Deerfield Management

James E. Flynn of Deerfield Management

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. Keeping this in mind let’s review the key hedge fund action regarding Larimar Therapeutics, Inc. (NASDAQ:LRMR).

Do Hedge Funds Think LRMR Is A Good Stock To Buy Now?

At Q1’s end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in LRMR over the last 23 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

The largest stake in Larimar Therapeutics, Inc. (NASDAQ:LRMR) was held by Deerfield Management, which reported holding $75.2 million worth of stock at the end of December. It was followed by RA Capital Management with a $22.1 million position. Other investors bullish on the company included Vivo Capital, OrbiMed Advisors, and Ikarian Capital. In terms of the portfolio weights assigned to each position Deerfield Management allocated the biggest weight to Larimar Therapeutics, Inc. (NASDAQ:LRMR), around 1.58% of its 13F portfolio. SilverArc Capital is also relatively very bullish on the stock, dishing out 1.53 percent of its 13F equity portfolio to LRMR.

As aggregate interest increased, key money managers have jumped into Larimar Therapeutics, Inc. (NASDAQ:LRMR) headfirst. Ikarian Capital, managed by Neil Shahrestani, established the biggest position in Larimar Therapeutics, Inc. (NASDAQ:LRMR). Ikarian Capital had $6.2 million invested in the company at the end of the quarter. Frank Fu’s CaaS Capital also made a $3.2 million investment in the stock during the quarter. The other funds with brand new LRMR positions are Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund and Ken Griffin’s Citadel Investment Group.

Let’s check out hedge fund activity in other stocks similar to Larimar Therapeutics, Inc. (NASDAQ:LRMR). We will take a look at Vista Oil & Gas, S.A.B. de C.V. (NYSE:VIST), Citius Pharmaceuticals, Inc. (NASDAQ:CTXR), Calyxt, Inc. (NASDAQ:CLXT), CompX International Inc. (NYSE:CIX), LCNB Corp. (NASDAQ:LCNB), Maui Land & Pineapple Company, Inc. (NYSE:MLP), and Alico, Inc. (NASDAQ:ALCO). This group of stocks’ market caps resemble LRMR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VIST 9 20667 -2
CTXR 5 2783 2
CLXT 5 1191 1
CIX 4 11901 0
LCNB 1 3072 -2
MLP 1 2032 -2
ALCO 6 10775 -1
Average 4.4 7489 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.4 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $155 million in LRMR’s case. Vista Oil & Gas, S.A.B. de C.V. (NYSE:VIST) is the most popular stock in this table. On the other hand LCNB Corp. (NASDAQ:LCNB) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Larimar Therapeutics, Inc. (NASDAQ:LRMR) is more popular among hedge funds. Our overall hedge fund sentiment score for LRMR is 88. 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 gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately LRMR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LRMR were disappointed as the stock returned -34.2% since the end of the first quarter (through 7/16) 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 most of these stocks already outperformed the market since 2019.

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