Is Forward Pharma A/S (FWP) Going to Burn These Hedge Funds?
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Forward Pharma A/S (NASDAQ:FWP) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is Forward Pharma A/S (NASDAQ:FWP) a buy, sell, or hold? Money managers were getting more bullish. The number of long hedge fund positions advanced by 1 lately. Forward Pharma A/S (NASDAQ:FWP) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 13. Our calculations also showed that FWP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
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. Now we're going to view the new hedge fund action surrounding Forward Pharma A/S (NASDAQ:FWP).
Do Hedge Funds Think FWP Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the fourth quarter of 2020. By comparison, 2 hedge funds held shares or bullish call options in FWP a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the most valuable position in Forward Pharma A/S (NASDAQ:FWP). Biotechnology Value Fund / BVF Inc has a $4.4 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $0.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Forward Pharma A/S (NASDAQ:FWP), around 0.17% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0005 percent of its 13F equity portfolio to FWP.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in Forward Pharma A/S (NASDAQ:FWP). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter.
Let's now take a look at hedge fund activity in other stocks similar to Forward Pharma A/S (NASDAQ:FWP). These stocks are Daxor Corporation (NYSE:DXR), Harbor Custom Development, Inc. (NASDAQ:HCDI), Cuentas Inc. (NASDAQ:CUEN), Addex Therapeutics Ltd (NASDAQ:ADXN), Histogen Inc. (NASDAQ:HSTO), Auris Medical Holding Ltd. (NASDAQ:EARS), and Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT). This group of stocks' market caps are similar to FWP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DXR,2,1740,0 HCDI,2,170,2 CUEN,2,92,2 ADXN,1,121,1 HSTO,2,120,0 EARS,2,1764,0 OPNT,2,2484,0 Average,1.9,927,0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.9 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $5 million in FWP's case. Daxor Corporation (NYSE:DXR) is the most popular stock in this table. On the other hand Addex Therapeutics Ltd (NASDAQ:ADXN) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Forward Pharma A/S (NASDAQ:FWP) is more popular among hedge funds. Our overall hedge fund sentiment score for FWP is 62.9. 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 returned 17.2% in 2021 through June 11th but still managed to beat the market by 3.3 percentage points. Hedge funds were also right about betting on FWP as the stock returned 10.1% since the end of March (through 6/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
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