Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Cellectar Biosciences, Inc. (NASDAQ:CLRB), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Cellectar Biosciences, Inc. (NASDAQ:CLRB) an exceptional investment now? Money managers were selling. The number of bullish hedge fund positions fell by 2 lately. Cellectar Biosciences, Inc. (NASDAQ:CLRB) was in 3 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. Our calculations also showed that CLRB 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). There were 5 hedge funds in our database with CLRB holdings at the end of June. Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 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. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
Michael Castor of Sio Capital
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 10 most profitable companies in the world 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. Keeping this in mind let's take a peek at the key hedge fund action surrounding Cellectar Biosciences, Inc. (NASDAQ:CLRB).
How are hedge funds trading Cellectar Biosciences, Inc. (NASDAQ:CLRB)?
At the end of September, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -40% from the second quarter of 2020. On the other hand, there were a total of 2 hedge funds with a bullish position in CLRB a year ago. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Sio Capital was the largest shareholder of Cellectar Biosciences, Inc. (NASDAQ:CLRB), with a stake worth $1.7 million reported as of the end of September. Trailing Sio Capital was Renaissance Technologies, which amassed a stake valued at $0.5 million. Sphera Global Healthcare Fund was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sio Capital allocated the biggest weight to Cellectar Biosciences, Inc. (NASDAQ:CLRB), around 0.34% of its 13F portfolio. Sphera Global Healthcare Fund is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to CLRB.
Judging by the fact that Cellectar Biosciences, Inc. (NASDAQ:CLRB) has experienced a decline in interest from the smart money, it's easy to see that there were a few money managers who sold off their full holdings last quarter. At the top of the heap, John Overdeck and David Siegel's Two Sigma Advisors dropped the biggest position of the "upper crust" of funds monitored by Insider Monkey, worth about $0.1 million in stock. Israel Englander's fund, Millennium Management, also said goodbye to its stock, about $0 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds last quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Cellectar Biosciences, Inc. (NASDAQ:CLRB) but similarly valued. These stocks are Annovis Bio, Inc. (NYSE:ANVS), SeaChange International (NASDAQ:SEAC), Aehr Test Systems (NASDAQ:AEHR), aTyr Pharma Inc. (NASDAQ:LIFE), Amplify Energy Corp. (NYSE:AMPY), Monaker Group, Inc. (NASDAQ:MKGI), and Superior Industries International Inc. (NYSE:SUP). This group of stocks' market valuations are closest to CLRB's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ANVS,3,246,2 SEAC,8,606,-3 AEHR,3,1867,1 LIFE,6,6329,1 AMPY,12,12882,-6 MKGI,2,854,1 SUP,12,5105,-1 Average,6.6,3984,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $2 million in CLRB's case. Amplify Energy Corp. (NYSE:AMPY) is the most popular stock in this table. On the other hand Monaker Group, Inc. (NASDAQ:MKGI) is the least popular one with only 2 bullish hedge fund positions. Cellectar Biosciences, Inc. (NASDAQ:CLRB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CLRB is 26. 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 negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 gained 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately CLRB wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CLRB investors were disappointed as the stock returned -1.6% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.