In this article we will check out the progression of hedge fund sentiment towards Nuvation Bio Inc. (NYSE:NUVB) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Nuvation Bio Inc. (NYSE:NUVB) an excellent investment now? Money managers were in a bearish mood. The number of long hedge fund bets decreased by 2 recently. Nuvation Bio Inc. (NYSE:NUVB) was in 22 hedge funds’ portfolios at the end of September. The all time high for this statistic is 30. Our calculations also showed that NUVB isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 24 hedge funds in our database with NUVB positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s go over the key hedge fund action regarding Nuvation Bio Inc. (NYSE:NUVB).
Do Hedge Funds Think NUVB Is A Good Stock To Buy Now?
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in NUVB a year ago. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Oleg Nodelman’s EcoR1 Capital has the number one position in Nuvation Bio Inc. (NYSE:NUVB), worth close to $136.3 million, comprising 4.7% of its total 13F portfolio. Coming in second is Baupost Group, managed by Seth Klarman, which holds a $85.4 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish comprise Ken Griffin’s Citadel Investment Group, Jeremy Green’s Redmile Group and David Abrams’s Abrams Capital Management. In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Nuvation Bio Inc. (NYSE:NUVB), around 4.74% of its 13F portfolio. Abrams Capital Management is also relatively very bullish on the stock, setting aside 0.83 percent of its 13F equity portfolio to NUVB.
Because Nuvation Bio Inc. (NYSE:NUVB) has faced declining sentiment from the smart money, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their positions entirely in the third quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP dropped the largest investment of the “upper crust” of funds monitored by Insider Monkey, worth close to $0.9 million in stock, and Lawrence Hawkins’s Prosight Capital was right behind this move, as the fund said goodbye to about $0.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nuvation Bio Inc. (NYSE:NUVB) but similarly valued. We will take a look at Sandy Spring Bancorp Inc. (NASDAQ:SASR), Piedmont Office Realty Trust, Inc. (NYSE:PDM), Dutch Bros Inc. (NYSE:BROS), Golden Ocean Group Ltd (NASDAQ:GOGL), EVgo Inc. (NASDAQ:EVGO), Progress Software Corporation (NASDAQ:PRGS), and Alkami Technology Inc. (NASDAQ:ALKT). All of these stocks’ market caps are closest to NUVB’s market cap.
|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 14 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $486 million in NUVB’s case. EVgo Inc. (NASDAQ:EVGO) is the most popular stock in this table. On the other hand Sandy Spring Bancorp Inc. (NASDAQ:SASR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Nuvation Bio Inc. (NYSE:NUVB) is more popular among hedge funds. Our overall hedge fund sentiment score for NUVB is 75. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately NUVB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NUVB were disappointed as the stock returned -14.5% since the end of the third quarter (through 12/31) 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.