We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Celldex Therapeutics, Inc. (NASDAQ:CLDX) based on that data.
Celldex Therapeutics, Inc. (NASDAQ:CLDX) investors should pay attention to a decrease in hedge fund sentiment in recent months. Our calculations also showed that CLDX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
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 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_673876" align="aligncenter" width="400"] John Overdeck of Two Sigma Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital's Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's go over the latest hedge fund action regarding Celldex Therapeutics, Inc. (NASDAQ:CLDX).
What does smart money think about Celldex Therapeutics, Inc. (NASDAQ:CLDX)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in CLDX a year ago. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Celldex Therapeutics, Inc. (NASDAQ:CLDX), with a stake worth $1.9 million reported as of the end of September. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $0 million. Citadel Investment Group was 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 Renaissance Technologies allocated the biggest weight to Celldex Therapeutics, Inc. (NASDAQ:CLDX), around 0.0019% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, setting aside 0.0005 percent of its 13F equity portfolio to CLDX.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Two Sigma Advisors. 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 none of the 750+ hedge funds tracked by Insider Monkey identified CLDX as a viable investment and initiated a position in the stock.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Celldex Therapeutics, Inc. (NASDAQ:CLDX) but similarly valued. These stocks are OncoSec Medical Incorporated (NASDAQ:ONCS), Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF), SilverBow Resorces, Inc. (NYSE:SBOW), and SRAX, Inc. (NASDAQ:SRAX). This group of stocks' market valuations are closest to CLDX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ONCS,2,404,0 RMCF,2,3264,0 SBOW,3,12402,-1 SRAX,1,244,0 Average,2,4079,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $2 million in CLDX's case. SilverBow Resorces, Inc. (NYSE:SBOW) is the most popular stock in this table. On the other hand SRAX, Inc. (NASDAQ:SRAX) is the least popular one with only 1 bullish hedge fund positions. Celldex Therapeutics, Inc. (NASDAQ:CLDX) is not the most popular stock in this group but hedge fund interest is still above average. 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 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on CLDX as the stock returned 62% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.