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 PDS Biotechnology Corporation (NASDAQ:PDSB)? The smart money sentiment can provide an answer to this question.
Is PDS Biotechnology Corporation (NASDAQ:PDSB) a buy right now? Money managers were becoming hopeful. The number of long hedge fund bets increased by 1 recently. PDS Biotechnology Corporation (NASDAQ:PDSB) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. Our calculations also showed that PDSB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a multitude of indicators market participants put to use to analyze publicly traded companies. A pair of the less utilized indicators are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the elite money managers can outpace their index-focused peers by a superb margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. With all of this in mind we’re going to view the latest hedge fund action surrounding PDS Biotechnology Corporation (NASDAQ:PDSB).
Hedge fund activity in PDS Biotechnology Corporation (NASDAQ:PDSB)
At third quarter’s end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in PDSB a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
The largest stake in PDS Biotechnology Corporation (NASDAQ:PDSB) was held by Renaissance Technologies, which reported holding $1.8 million worth of stock at the end of September. It was followed by Sabby Capital with a $1 million position. The only other hedge fund that is bullish on the company was Bourgeon Capital.
As one would reasonably expect, key money managers have been driving this bullishness. Sabby Capital, managed by Hal Mintz, established the most outsized position in PDS Biotechnology Corporation (NASDAQ:PDSB). Sabby Capital had $1 million invested in the company at the end of the quarter. John Zaro’s Bourgeon Capital also initiated a $0 million position during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as PDS Biotechnology Corporation (NASDAQ:PDSB) but similarly valued. We will take a look at Kentucky First Federal Bancorp (NASDAQ:KFFB), Organovo Holdings Inc (NASDAQ:ONVO), VistaGen Therapeutics, Inc. (NASDAQ:VTGN), Onconova Therapeutics, Inc. (NASDAQ:ONTX), Aileron Therapeutics, Inc. (NASDAQ:ALRN), Performant Financial Corp (NASDAQ:PFMT), and Dover Motorsports, Inc. (NYSE:DVD). This group of stocks’ market caps resemble PDSB’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 2.3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $3 million in PDSB’s case. Aileron Therapeutics, Inc. (NASDAQ:ALRN) is the most popular stock in this table. On the other hand Kentucky First Federal Bancorp (NASDAQ:KFFB) is the least popular one with only 1 bullish hedge fund positions. PDS Biotechnology Corporation (NASDAQ:PDSB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PDSB is 61.8. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and beat the market again by 15.4 percentage points. Unfortunately PDSB wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PDSB were disappointed as the stock returned -16.3% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 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.