Is Gain Therapeutics, Inc. (GANX) A Good Stock To Buy?
In this article we will analyze whether Gain Therapeutics, Inc. (NASDAQ:GANX) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is GANX a good stock to buy? Investors who are in the know were betting on the stock. The number of bullish hedge fund positions went up by 5 in recent months. Gain Therapeutics, Inc. (NASDAQ:GANX) was in 5 hedge funds' portfolios at the end of March. Our calculations also showed that GANX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
David Einhorn of Greenlight Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $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 go over the key hedge fund action regarding Gain Therapeutics, Inc. (NASDAQ:GANX).
Do Hedge Funds Think GANX Is A Good Stock To Buy Now?
At the end of March, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5 from the fourth quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in GANX a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Greenlight Capital was the largest shareholder of Gain Therapeutics, Inc. (NASDAQ:GANX), with a stake worth $8.2 million reported as of the end of March. Trailing Greenlight Capital was Granite Point Capital, which amassed a stake valued at $3.4 million. AIGH Investment Partners, Prelude Capital (previously Springbok Capital), and Millennium Management were 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 Greenlight Capital allocated the biggest weight to Gain Therapeutics, Inc. (NASDAQ:GANX), around 0.57% of its 13F portfolio. AIGH Investment Partners is also relatively very bullish on the stock, designating 0.21 percent of its 13F equity portfolio to GANX.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Greenlight Capital, managed by David Einhorn, created the most valuable position in Gain Therapeutics, Inc. (NASDAQ:GANX). Greenlight Capital had $8.2 million invested in the company at the end of the quarter. Warren Lammert's Granite Point Capital also initiated a $3.4 million position during the quarter. The other funds with new positions in the stock are Orin Hirschman's AIGH Investment Partners, Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital), and Israel Englander's Millennium Management.
Let's also examine hedge fund activity in other stocks similar to Gain Therapeutics, Inc. (NASDAQ:GANX). We will take a look at ImmunoPrecise Antibodies Ltd. (NASDAQ:IPA), First Northwest Bancorp (NASDAQ:FNWB), USA Truck, Inc. (NASDAQ:USAK), Amtech Systems, Inc. (NASDAQ:ASYS), Concord Medical Services Hldg Ltd (NYSE:CCM), The Eastern Company (NASDAQ:EML), and Genie Energy Ltd (NYSE:GNE). This group of stocks' market values match GANX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IPA,1,1472,1 FNWB,2,18108,0 USAK,3,4627,-3 ASYS,12,21388,5 CCM,2,929,1 EML,5,45641,0 GNE,7,8123,-2 Average,4.6,14327,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.6 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $14 million in GANX's case. Amtech Systems, Inc. (NASDAQ:ASYS) is the most popular stock in this table. On the other hand ImmunoPrecise Antibodies Ltd. (NASDAQ:IPA) is the least popular one with only 1 bullish hedge fund positions. Gain Therapeutics, Inc. (NASDAQ:GANX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GANX is 39.1. 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately GANX wasn't nearly as popular as these 5 stocks and hedge funds that were betting on GANX were disappointed as the stock returned -39.1% since the end of March (through 6/18) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
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