Where Do Hedge Funds Stand On Trevena Inc (TRVN)?

The Insider Monkey team has completed processing the quarterly 13F filings for the September 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 Trevena Inc (NASDAQ:TRVN).

Trevena Inc (NASDAQ:TRVN) has seen a decrease in hedge fund interest of late. Trevena Inc (NASDAQ:TRVN) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 19. There were 6 hedge funds in our database with TRVN positions at the end of the second quarter. Our calculations also showed that TRVN 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Louis Bacon Moore of Moore Capital

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 15 best blue chip stocks 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. Now we’re going to take a glance at the recent hedge fund action encompassing Trevena Inc (NASDAQ:TRVN).

How have hedgies been trading Trevena Inc (NASDAQ:TRVN)?

At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the second quarter of 2020. On the other hand, there were a total of 6 hedge funds with a bullish position in TRVN 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.

According to Insider Monkey’s hedge fund database, David Harding’s Winton Capital Management has the most valuable position in Trevena Inc (NASDAQ:TRVN), worth close to $1.2 million, comprising less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $0.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise Louis Bacon’s Moore Global Investments, and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Trevena Inc (NASDAQ:TRVN), around 0.04% of its 13F portfolio. Moore Global Investments is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to TRVN.

Seeing as Trevena Inc (NASDAQ:TRVN) has experienced a decline in interest from the smart money, logic holds that there exists a select few money managers who were dropping their full holdings heading into Q4. At the top of the heap, Israel Englander’s Millennium Management dropped the largest stake of the “upper crust” of funds monitored by Insider Monkey, worth close to $0 million in stock. John Zaro’s fund, Bourgeon Capital, also dropped its stock, about $0 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 1 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Trevena Inc (NASDAQ:TRVN) but similarly valued. These stocks are Collectors Universe, Inc. (NASDAQ:CLCT), AngioDynamics, Inc. (NASDAQ:ANGO), Energy Recovery, Inc. (NASDAQ:ERII), Watford Holdings Ltd. (NASDAQ:WTRE), American Software, Inc. (NASDAQ:AMSWA), Inventiva S.A. (NASDAQ:IVA), and Ennis, Inc. (NYSE:EBF). All of these stocks’ market caps resemble TRVN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CLCT 11 65834 2
ANGO 14 37453 4
ERII 11 54125 -1
WTRE 11 16288 5
AMSWA 11 40697 -1
IVA 8 26719 8
EBF 8 62311 -2
Average 10.6 43347 2.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $2 million in TRVN’s case. AngioDynamics, Inc. (NASDAQ:ANGO) is the most popular stock in this table. On the other hand Inventiva S.A. (NASDAQ:IVA) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Trevena Inc (NASDAQ:TRVN) is even less popular than IVA. Our overall hedge fund sentiment score for TRVN is 11.9. 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. Hedge funds dodged a bullet by taking a bearish stance towards TRVN. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th but managed to beat the market again by 16.1 percentage points. Unfortunately TRVN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); TRVN investors were disappointed as the stock returned -14% since the end of the third quarter (through 11/27) 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 most of these stocks already outperformed the market so far in 2020.

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