U.S. Markets closed

Is Clovis Oncology Inc (CLVS) A Good Stock To Buy?

Nina Todic

Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Clovis Oncology Inc (NASDAQ:CLVS) was in 29 hedge funds' portfolios at the end of March. CLVS investors should be aware of an increase in hedge fund sentiment lately. There were 24 hedge funds in our database with CLVS positions at the end of the previous quarter. Our calculations also showed that clvs isn't among the 30 most popular stocks among hedge funds.

In the eyes of most stock holders, hedge funds are seen as underperforming, outdated financial tools of years past. While there are over 8000 funds with their doors open today, Our experts choose to focus on the moguls of this club, approximately 750 funds. These investment experts shepherd the lion's share of all hedge funds' total asset base, and by shadowing their matchless stock picks, Insider Monkey has spotted numerous investment strategies that have historically beaten the broader indices. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.

Samuel Isaly Orbimed Advisors

Let's take a look at the recent hedge fund action encompassing Clovis Oncology Inc (NASDAQ:CLVS).

How are hedge funds trading Clovis Oncology Inc (NASDAQ:CLVS)?

At the end of the first quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from one quarter earlier. On the other hand, there were a total of 39 hedge funds with a bullish position in CLVS a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

No of Hedge Funds with CLVS Positions

Of the funds tracked by Insider Monkey, William Leland Edwards's Palo Alto Investors has the biggest position in Clovis Oncology Inc (NASDAQ:CLVS), worth close to $130 million, comprising 5.4% of its total 13F portfolio. On Palo Alto Investors's heels is Redmile Group, managed by Jeremy Green, which holds a $113.3 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism encompass Samuel Isaly's OrbiMed Advisors, Steven Boyd's Armistice Capital and Stephen DuBois's Camber Capital Management.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, initiated the most valuable position in Clovis Oncology Inc (NASDAQ:CLVS). Healthcor Management LP had $34.7 million invested in the company at the end of the quarter. Dan Kamensky's Marble Ridge Capital also made a $15.8 million investment in the stock during the quarter. The other funds with brand new CLVS positions are Kenneth Tropin's Graham Capital Management, Christopher James's Partner Fund Management, and James E. Flynn's Deerfield Management.

Let's go over hedge fund activity in other stocks similar to Clovis Oncology Inc (NASDAQ:CLVS). These stocks are Fresh Del Monte Produce Inc (NYSE:FDP), Getty Realty Corp. (NYSE:GTY), MGP Ingredients Inc (NASDAQ:MGPI), and Gulfport Energy Corporation (NASDAQ:GPOR). This group of stocks' market valuations match CLVS's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FDP,14,43087,-1 GTY,9,89875,1 MGPI,13,24351,5 GPOR,23,141764,1 Average,14.75,74769,1.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $567 million in CLVS's case. Gulfport Energy Corporation (NASDAQ:GPOR) is the most popular stock in this table. On the other hand Getty Realty Corp. (NYSE:GTY) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Clovis Oncology Inc (NASDAQ:CLVS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately CLVS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CLVS were disappointed as the stock returned -39.5% during the same period 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 13 of these stocks already outperformed the market in Q2.

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

Related Content