As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Bellicum Pharmaceuticals Inc (NASDAQ:BLCM).
Is Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) ready to rally soon? The best stock pickers were getting less bullish. The number of long hedge fund positions retreated by 3 recently. Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 17. Our calculations also showed that BLCM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Felix Baker of Baker Bros.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. 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. With all of this in mind we're going to go over the latest hedge fund action encompassing Bellicum Pharmaceuticals Inc (NASDAQ:BLCM).
Do Hedge Funds Think BLCM Is A Good Stock To Buy Now?
At Q1's end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -50% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in BLCM 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.
The largest stake in Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) was held by Ikarian Capital, which reported holding $1.9 million worth of stock at the end of December. It was followed by Baker Bros. Advisors with a $0.9 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.
Since Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) has faced falling interest from the aggregate hedge fund industry, logic holds that there lies a certain "tier" of fund managers that slashed their positions entirely last quarter. Interestingly, Hal Mintz's Sabby Capital sold off the biggest investment of all the hedgies tracked by Insider Monkey, comprising about $0.6 million in stock, and Renaissance Technologies was right behind this move, as the fund cut about $0.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to Bellicum Pharmaceuticals Inc (NASDAQ:BLCM). We will take a look at Dragon Victory International Limited (NASDAQ:LYL), Hudson Capital Inc. (NASDAQ:HUSN), Intec Pharma Ltd (NASDAQ:NTEC), SemiLEDs Corporation (NASDAQ:LEDS), Nova Lifestyle, Inc (NASDAQ:NVFY), Safe-T Group Ltd. (NASDAQ:SFET), and Dynatronics Corporation (NASDAQ:DYNT). This group of stocks' market valuations are closest to BLCM's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LYL,1,100,-1 HUSN,1,535,-1 NTEC,2,262,-2 LEDS,2,1243,1 NVFY,2,533,1 SFET,2,819,1 DYNT,2,837,-1 Average,1.7,618,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.7 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $3 million in BLCM's case. Intec Pharma Ltd (NASDAQ:NTEC) is the most popular stock in this table. On the other hand Dragon Victory International Limited (NASDAQ:LYL) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is more popular among hedge funds. Our overall hedge fund sentiment score for BLCM is 57.3. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately BLCM wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BLCM were disappointed as the stock returned -12.5% since the end of the first quarter (through 6/11) 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.