"Value has performed relatively poorly since the 2017 shift, but we believe challenges to the S&P 500’s dominance are mounting and resulting active opportunities away from the index are growing. At some point, this fault line will break, likely on the back of rising rates, and all investors will be reminded that the best time to diversify away from the winners is when it is most painful. The bargain of capturing long-term value may be short-term pain, but enough is eventually enough and it comes time to harvest the benefits.," said Clearbridge Investments in its market commentary. We aren't sure whether long-term interest rates will top 5% and value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That's why we believe it would be worthwhile to take a look at the hedge fund sentiment on TG Therapeutics Inc (NASDAQ:TGTX) in order to identify whether reputable and successful top money managers continue to believe in its potential.
TG Therapeutics Inc (NASDAQ:TGTX) was in 19 hedge funds' portfolios at the end of the third quarter of 2018. TGTX has seen an increase in support from the world's most elite money managers of late. There were 18 hedge funds in our database with TGTX positions at the end of the previous quarter. Our calculations also showed that TGTX isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to check out the fresh hedge fund action regarding TG Therapeutics Inc (NASDAQ:TGTX).
How have hedgies been trading TG Therapeutics Inc (NASDAQ:TGTX)?
Heading into the fourth quarter of 2018, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards TGTX over the last 13 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, RA Capital Management was the largest shareholder of TG Therapeutics Inc (NASDAQ:TGTX), with a stake worth $45.9 million reported as of the end of September. Trailing RA Capital Management was venBio Select Advisor, which amassed a stake valued at $23.5 million. Bridger Management, Great Point Partners, and Highland Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, some big names were leading the bulls' herd. Great Point Partners, managed by Jeffrey Jay and David Kroin, created the most outsized position in TG Therapeutics Inc (NASDAQ:TGTX). Great Point Partners had $10.9 million invested in the company at the end of the quarter. Ari Zweiman's 683 Capital Partners also made a $2.8 million investment in the stock during the quarter. The only other fund with a new position in the stock is Jim Simons's Renaissance Technologies.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as TG Therapeutics Inc (NASDAQ:TGTX) but similarly valued. These stocks are Merus N.V. (NASDAQ:MRUS), New Gold Inc. (NYSEAMEX:NGD), Dermira Inc (NASDAQ:DERM), and Blackrock MuniYield New York Quality Fund, Inc. (NYSE:MYN). All of these stocks' market caps are closest to TGTX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRUS,6,104782,1 NGD,14,47687,0 DERM,17,88394,0 MYN,2,2216,-1 Average,9.75,60770,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $113 million in TGTX's case. Dermira Inc (NASDAQ:DERM) is the most popular stock in this table. On the other hand Blackrock MuniYield New York Quality Fund, Inc. (NYSE:MYN) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks TG Therapeutics Inc (NASDAQ:TGTX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.