Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Antares Pharma Inc (NASDAQ:ATRS).
Is ATRS a good stock to buy now? Antares Pharma Inc (NASDAQ:ATRS) was in 18 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. ATRS has experienced a decrease in enthusiasm from smart money of late. There were 20 hedge funds in our database with ATRS positions at the end of the second quarter. Our calculations also showed that ATRS 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.
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 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 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.
Donald Sussman of Paloma Partners
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 let's take a look at the fresh hedge fund action encompassing Antares Pharma Inc (NASDAQ:ATRS).
Do Hedge Funds Think ATRS Is A Good Stock To Buy Now?
At Q3's end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in ATRS a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Antares Pharma Inc (NASDAQ:ATRS) was held by Two Sigma Advisors, which reported holding $3.6 million worth of stock at the end of September. It was followed by Stonepine Capital with a $3.3 million position. Other investors bullish on the company included Motley Fool Asset Management, AQR Capital Management, and Healthcare Value Capital. In terms of the portfolio weights assigned to each position Healthcare Value Capital allocated the biggest weight to Antares Pharma Inc (NASDAQ:ATRS), around 4.45% of its 13F portfolio. Stonepine Capital is also relatively very bullish on the stock, earmarking 3.39 percent of its 13F equity portfolio to ATRS.
Since Antares Pharma Inc (NASDAQ:ATRS) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain "tier" of money managers who were dropping their positions entirely heading into Q4. Interestingly, Mark Coe's Intrinsic Edge Capital dropped the biggest investment of the "upper crust" of funds monitored by Insider Monkey, totaling about $1.8 million in stock. Guy Levy's fund, Soleus Capital, also cut its stock, about $0.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 2 funds heading into Q4.
Let's check out hedge fund activity in other stocks similar to Antares Pharma Inc (NASDAQ:ATRS). These stocks are Geopark Ltd (NYSE:GPRK), Global Partners LP (NYSE:GLP), Despegar.com, Corp. (NYSE:DESP), Cue Biopharma, Inc. (NASDAQ:CUE), NetSTREIT Corp. (NYSE:NTST), Horizon Bancorp (NASDAQ:HBNC), and Vectrus Inc (NYSE:VEC). This group of stocks' market valuations match ATRS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GPRK,12,52867,-1 GLP,2,5605,0 DESP,17,98334,-1 CUE,15,155293,-3 NTST,10,92763,10 HBNC,12,16845,-2 VEC,17,39968,1 Average,12.1,65954,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $18 million in ATRS's case. Despegar.com, Corp. (NYSE:DESP) is the most popular stock in this table. On the other hand Global Partners LP (NYSE:GLP) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Antares Pharma Inc (NASDAQ:ATRS) is more popular among hedge funds. Our overall hedge fund sentiment score for ATRS is 80. 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 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 returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on ATRS as the stock returned 38.5% since the end of September (through 12/14) 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.