A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Mustang Bio, Inc. (NASDAQ:MBIO).
Hedge fund interest in Mustang Bio, Inc. (NASDAQ:MBIO) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as County Bancorp, Inc. (NASDAQ:ICBK), iCAD Inc (NASDAQ:ICAD), and Axcella Health Inc. (NASDAQ:AXLA) to gather more data points. Our calculations also showed that MBIO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a lot of indicators market participants have at their disposal to grade publicly traded companies. A pair of the most underrated indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass the S&P 500 by a significant margin (see the details here).
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Keeping this in mind let's take a gander at the key hedge fund action regarding Mustang Bio, Inc. (NASDAQ:MBIO).
How have hedgies been trading Mustang Bio, Inc. (NASDAQ:MBIO)?
At Q3's end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MBIO over the last 17 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Mustang Bio, Inc. (NASDAQ:MBIO) was held by Consonance Capital Management, which reported holding $10.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $2.3 million position. Other investors bullish on the company included 683 Capital Partners, Highland Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position Consonance Capital Management allocated the biggest weight to Mustang Bio, Inc. (NASDAQ:MBIO), around 1.02% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, dishing out 0.23 percent of its 13F equity portfolio to MBIO.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Alyeska Investment Group. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let's check out hedge fund activity in other stocks similar to Mustang Bio, Inc. (NASDAQ:MBIO). These stocks are County Bancorp, Inc. (NASDAQ:ICBK), iCAD Inc (NASDAQ:ICAD), Axcella Health Inc. (NASDAQ:AXLA), and Adams Resources & Energy Inc (NYSE:AE). This group of stocks' market values match MBIO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ICBK,6,11470,1 ICAD,6,8038,-2 AXLA,3,1069,-1 AE,5,12371,0 Average,5,8237,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $16 million in MBIO's case. County Bancorp, Inc. (NASDAQ:ICBK) is the most popular stock in this table. On the other hand Axcella Health Inc. (NASDAQ:AXLA) is the least popular one with only 3 bullish hedge fund positions. Mustang Bio, Inc. (NASDAQ:MBIO) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately MBIO wasn't nearly as popular as these 20 stocks and hedge funds that were betting on MBIO were disappointed as the stock returned -2.8% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.