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Should I Buy Pulmatrix, Inc. (PULM)?

·6 min read

In this article we will check out the progression of hedge fund sentiment towards Pulmatrix, Inc. (NASDAQ:PULM) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Pulmatrix, Inc. (NASDAQ:PULM) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds' portfolios at the end of March. Our calculations also showed that PULM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare PULM to other stocks including Atlantic American Corporation (NASDAQ:AAME), SIFCO Industries, Inc. (NYSE:SIF), and Jupai Holdings Limited (NYSE:JP) to get a better sense of its popularity.

According to most market participants, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are over 8000 funds with their doors open at the moment, We hone in on the masters of this group, approximately 850 funds. These hedge fund managers handle the majority of the smart money's total capital, and by observing their matchless stock picks, Insider Monkey has revealed many investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Billionaire David Siegel's Top 10 Stock Picks
Billionaire David Siegel's Top 10 Stock Picks

David Siegel of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 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 take a gander at the latest hedge fund action regarding Pulmatrix, Inc. (NASDAQ:PULM).

Do Hedge Funds Think PULM Is A Good Stock To Buy Now?

At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PULM over the last 23 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

Is PULM A Good Stock To Buy?
Is PULM A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the biggest position in Pulmatrix, Inc. (NASDAQ:PULM), worth close to $3.2 million, corresponding to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $0.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish include Ken Griffin's Citadel Investment Group, John Overdeck and David Siegel's Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Pulmatrix, Inc. (NASDAQ:PULM), around 0.004% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, dishing out 0.0001 percent of its 13F equity portfolio to PULM.

Because Pulmatrix, Inc. (NASDAQ:PULM) has experienced falling interest from hedge fund managers, we can see that there lies a certain "tier" of funds that slashed their full holdings heading into Q2. It's worth mentioning that Hal Mintz's Sabby Capital sold off the largest position of the 750 funds tracked by Insider Monkey, worth close to $2.4 million in stock. David Harding's fund, Winton Capital Management, also dumped its stock, about $0 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's now take a look at hedge fund activity in other stocks similar to Pulmatrix, Inc. (NASDAQ:PULM). These stocks are Atlantic American Corporation (NASDAQ:AAME), SIFCO Industries, Inc. (NYSE:SIF), Jupai Holdings Limited (NYSE:JP), ECMOHO Limited (NASDAQ:MOHO), Dover Motorsports, Inc. (NYSE:DVD), Network-1 Technologies Inc (NYSE:NTIP), and TOP Ships Inc. (NASDAQ:TOPS). This group of stocks' market caps are similar to PULM's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AAME,2,340,1 SIF,4,7078,1 JP,2,713,1 MOHO,2,640,1 DVD,4,8641,1 NTIP,2,4502,0 TOPS,1,189,1 Average,2.4,3158,0.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.4 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $3 million in PULM's case. SIFCO Industries, Inc. (NYSE:SIF) is the most popular stock in this table. On the other hand TOP Ships Inc. (NASDAQ:TOPS) is the least popular one with only 1 bullish hedge fund positions. Pulmatrix, Inc. (NASDAQ:PULM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PULM is 79. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 3.3 percentage points. Unfortunately PULM wasn't nearly as popular as these 5 stocks and hedge funds that were betting on PULM were disappointed as the stock returned -14.3% since the end of March (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 many of these stocks already outperformed the market since 2019.

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

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