Is Bioline RX Ltd (BLRX) Going to Burn These Hedge Funds?
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 Bioline RX Ltd (NASDAQ:BLRX).
Hedge fund interest in Bioline RX Ltd (NASDAQ:BLRX) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare BLRX to other stocks including The Alkaline Water Company Inc. (NASDAQ:WTER), China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC), and Spring Bank Pharmaceuticals, Inc. (NASDAQ:SBPH) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_341400" align="aligncenter" width="400"]
Samuel Isaly of OrbiMed Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a look at the latest hedge fund action regarding Bioline RX Ltd (NASDAQ:BLRX).
What have hedge funds been doing with Bioline RX Ltd (NASDAQ:BLRX)?
At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards BLRX over the last 18 quarters. With hedge funds' capital changing hands, there exists a few key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the most valuable position in Bioline RX Ltd (NASDAQ:BLRX). Biotechnology Value Fund / BVF Inc has a $2.3 million position in the stock, comprising 0.2% of its 13F portfolio. On Biotechnology Value Fund / BVF Inc's heels is Rima Senvest Management, led by Richard Mashaal, holding a $0.7 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism comprise Samuel Isaly's OrbiMed Advisors, James A. Silverman's Opaleye Management and . In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Bioline RX Ltd (NASDAQ:BLRX), around 0.21% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, setting aside 0.08 percent of its 13F equity portfolio to BLRX.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Bioline RX Ltd (NASDAQ:BLRX) but similarly valued. These stocks are The Alkaline Water Company Inc. (NASDAQ:WTER), China SXT Pharmaceuticals, Inc. (NASDAQ:SXTC), Spring Bank Pharmaceuticals, Inc. (NASDAQ:SBPH), and Teligent, Inc. (NASDAQ:TLGT). All of these stocks' market caps are closest to BLRX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WTER,1,184,-1 SXTC,3,1553,1 SBPH,4,1219,-1 TLGT,2,1088,-1 Average,2.5,1011,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.5 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $3 million in BLRX's case. Spring Bank Pharmaceuticals, Inc. (NASDAQ:SBPH) is the most popular stock in this table. On the other hand The Alkaline Water Company Inc. (NASDAQ:WTER) is the least popular one with only 1 bullish hedge fund positions. Bioline RX Ltd (NASDAQ:BLRX) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on BLRX as the stock returned 45.9% in Q2 (through the end of May) 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.
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