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While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Celldex Therapeutics, Inc. (NASDAQ:CLDX).
Is Celldex Therapeutics, Inc. (NASDAQ:CLDX) worth your attention right now? Hedge funds were taking a bearish view. The number of bullish hedge fund bets fell by 4 lately. Celldex Therapeutics, Inc. (NASDAQ:CLDX) was in 22 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 26. Our calculations also showed that CLDX isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 26 hedge funds in our database with CLDX positions at the end of the first quarter.
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 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Robert Atchinson of Adage Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. Now we're going to go over the fresh hedge fund action encompassing Celldex Therapeutics, Inc. (NASDAQ:CLDX).
Do Hedge Funds Think CLDX Is A Good Stock To Buy Now?
At second quarter's end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CLDX over the last 24 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Celldex Therapeutics, Inc. (NASDAQ:CLDX) was held by Redmile Group, which reported holding $100.7 million worth of stock at the end of June. It was followed by Adage Capital Management with a $60.8 million position. Other investors bullish on the company included Acuta Capital Partners, Opaleye Management, and Vivo Capital. In terms of the portfolio weights assigned to each position Acuta Capital Partners allocated the biggest weight to Celldex Therapeutics, Inc. (NASDAQ:CLDX), around 13.19% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, earmarking 5.47 percent of its 13F equity portfolio to CLDX.
Judging by the fact that Celldex Therapeutics, Inc. (NASDAQ:CLDX) has experienced declining sentiment from hedge fund managers, we can see that there is a sect of funds that elected to cut their positions entirely by the end of the second quarter. At the top of the heap, Israel Englander's Millennium Management dropped the largest stake of all the hedgies followed by Insider Monkey, worth an estimated $10.4 million in stock, and Doron Breen and Mori Arkin's Sphera Global Healthcare Fund was right behind this move, as the fund dumped about $4.5 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 4 funds by the end of the second quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Celldex Therapeutics, Inc. (NASDAQ:CLDX) but similarly valued. These stocks are Seabridge Gold, Inc. (NYSE:SA), Knoll Inc (NYSE:KNL), The Shyft Group, Inc. (NASDAQ:SHYF), Sapiens International Corporation N.V. (NASDAQ:SPNS), ImmunoGen, Inc. (NASDAQ:IMGN), The Bancorp, Inc. (NASDAQ:TBBK), and Teekay LNG Partners L.P. (NYSE:TGP). This group of stocks' market caps resemble CLDX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SA,11,120774,3 KNL,21,326522,11 SHYF,11,106618,-2 SPNS,9,37662,-3 IMGN,26,421203,0 TBBK,16,48755,-2 TGP,9,28560,0 Average,14.7,155728,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $421 million in CLDX's case. ImmunoGen, Inc. (NASDAQ:IMGN) is the most popular stock in this table. On the other hand Sapiens International Corporation N.V. (NASDAQ:SPNS) is the least popular one with only 9 bullish hedge fund positions. Celldex Therapeutics, Inc. (NASDAQ:CLDX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CLDX is 64.6. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on CLDX as the stock returned 41.7% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.