Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Cassava Sciences, Inc. (NASDAQ:SAVA) based on that data.
Cassava Sciences, Inc. (NASDAQ:SAVA) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds' portfolios at the end of the first quarter of 2020. At the end of this article we will also compare SAVA to other stocks including Sutter Rock Capital Corp. (NASDAQ:SSSS), Middlefield Banc Corp. (NASDAQ:MBCN), and Gamida Cell Ltd. (NASDAQ:GMDA) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a large number of indicators stock traders have at their disposal to assess publicly traded companies. A couple of the most useful indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can trounce the market by a significant amount (see the details here).
[caption id="attachment_341400" align="aligncenter" width="400"] Samuel Isaly of OrbiMed Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's analyze the fresh hedge fund action regarding Cassava Sciences, Inc. (NASDAQ:SAVA).
What does smart money think about Cassava Sciences, Inc. (NASDAQ:SAVA)?
Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SAVA over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Renaissance Technologies has the number one position in Cassava Sciences, Inc. (NASDAQ:SAVA), worth close to $2.7 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Sphera Global Healthcare Fund, led by Doron Breen and Mori Arkin, holding a $2.5 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism comprise Samuel Isaly's OrbiMed Advisors, Neil Shahrestani's Ikarian Capital and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Sphera Global Healthcare Fund allocated the biggest weight to Cassava Sciences, Inc. (NASDAQ:SAVA), around 0.32% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, setting aside 0.09 percent of its 13F equity portfolio to SAVA.
Judging by the fact that Cassava Sciences, Inc. (NASDAQ:SAVA) has witnessed a decline in interest from the entirety of the hedge funds we track, it's easy to see that there is a sect of money managers who sold off their positions entirely by the end of the first quarter. Interestingly, Michael Gelband's ExodusPoint Capital dropped the largest investment of all the hedgies tracked by Insider Monkey, worth close to $0.5 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also dropped its stock, about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Cassava Sciences, Inc. (NASDAQ:SAVA) but similarly valued. We will take a look at Sutter Rock Capital Corp. (NASDAQ:SSSS), Middlefield Banc Corp. (NASDAQ:MBCN), Gamida Cell Ltd. (NASDAQ:GMDA), and CB Financial Services, Inc. (NASDAQ:CBFV). This group of stocks' market caps match SAVA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SSSS,8,8303,0 MBCN,4,10830,-1 GMDA,5,7222,0 CBFV,4,2765,-2 Average,5.25,7280,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $8 million in SAVA's case. Sutter Rock Capital Corp. (NASDAQ:SSSS) is the most popular stock in this table. On the other hand Middlefield Banc Corp. (NASDAQ:MBCN) is the least popular one with only 4 bullish hedge fund positions. Cassava Sciences, Inc. (NASDAQ:SAVA) is not the least popular stock in this group but hedge fund interest is still below average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately SAVA wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); SAVA investors were disappointed as the stock returned -47.9% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.