In this article we will take a look at whether hedge funds think ADMA Biologics Inc (NASDAQ:ADMA) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
ADMA Biologics Inc (NASDAQ:ADMA) shareholders have witnessed an increase in enthusiasm from smart money recently. Our calculations also showed that ADMA 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. Now let's go over the new hedge fund action regarding ADMA Biologics Inc (NASDAQ:ADMA).
Hedge fund activity in ADMA Biologics Inc (NASDAQ:ADMA)
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 58% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ADMA over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in ADMA Biologics Inc (NASDAQ:ADMA) was held by Perceptive Advisors, which reported holding $47.8 million worth of stock at the end of September. It was followed by Consonance Capital Management with a $9.7 million position. Other investors bullish on the company included 683 Capital Partners, Sphera Global Healthcare Fund, and Prosight Capital. In terms of the portfolio weights assigned to each position Prosight Capital allocated the biggest weight to ADMA Biologics Inc (NASDAQ:ADMA), around 1.67% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, earmarking 1.24 percent of its 13F equity portfolio to ADMA.
Consequently, some big names have jumped into ADMA Biologics Inc (NASDAQ:ADMA) headfirst. Sphera Global Healthcare Fund, managed by Doron Breen and Mori Arkin, established the most valuable position in ADMA Biologics Inc (NASDAQ:ADMA). Sphera Global Healthcare Fund had $5.3 million invested in the company at the end of the quarter. Lawrence Hawkins's Prosight Capital also made a $3.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Benjamin A. Smith's Laurion Capital Management, Paul Marshall and Ian Wace's Marshall Wace LLP, and Neil Shahrestani's Ikarian Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as ADMA Biologics Inc (NASDAQ:ADMA) but similarly valued. We will take a look at Paysign, Inc. (NASDAQ:PAYS), OneSpaWorld Holdings Limited (NASDAQ:OSW), Civista Bancshares, Inc. (NASDAQ:CIVB), and Consolidated Water Co. Ltd. (NASDAQ:CWCO). All of these stocks' market caps are similar to ADMA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PAYS,11,14615,-4 OSW,15,33475,4 CIVB,11,13075,1 CWCO,5,14678,0 Average,10.5,18961,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $87 million in ADMA's case. OneSpaWorld Holdings Limited (NASDAQ:OSW) is the most popular stock in this table. On the other hand Consolidated Water Co. Ltd. (NASDAQ:CWCO) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks ADMA Biologics Inc (NASDAQ:ADMA) is more popular among hedge funds. 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 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. Unfortunately ADMA wasn't nearly as popular as these 10 stocks and hedge funds that were betting on ADMA were disappointed as the stock returned 2.4% during the second quarter (through June 22nd) 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.