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 Antares Pharma Inc (NASDAQ:ATRS) based on that data.
Is Antares Pharma Inc (NASDAQ:ATRS) the right investment to pursue these days? Money managers are taking an optimistic view. The number of long hedge fund bets improved by 7 lately. Our calculations also showed that ATRS 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). ATRS was in 20 hedge funds' portfolios at the end of the first quarter of 2020. There were 13 hedge funds in our database with ATRS positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
[caption id="attachment_843152" align="aligncenter" width="396"] Tim Lynch of Stonepine Capital[/caption]
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 take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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 review the key hedge fund action surrounding Antares Pharma Inc (NASDAQ:ATRS).
Hedge fund activity in Antares Pharma Inc (NASDAQ:ATRS)
Heading into the second quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 54% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in ATRS over the last 18 quarters. With hedgies' capital changing hands, there exists an "upper tier" of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Two Sigma Advisors held the most valuable stake in Antares Pharma Inc (NASDAQ:ATRS), which was worth $3.7 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $3.2 million worth of shares. Millennium Management, Intrinsic Edge Capital, and Soleus Capital were 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 Soleus Capital allocated the biggest weight to Antares Pharma Inc (NASDAQ:ATRS), around 2.37% of its 13F portfolio. Healthcare Value Capital is also relatively very bullish on the stock, dishing out 1.98 percent of its 13F equity portfolio to ATRS.
As aggregate interest increased, some big names were leading the bulls' herd. Intrinsic Edge Capital, managed by Mark Coe, established the largest position in Antares Pharma Inc (NASDAQ:ATRS). Intrinsic Edge Capital had $2.4 million invested in the company at the end of the quarter. Guy Levy's Soleus Capital also initiated a $2 million position during the quarter. The following funds were also among the new ATRS investors: Greg Eisner's Engineers Gate Manager, Timothy P. Lynch's Stonepine Capital, and Alec Litowitz and Ross Laser's Magnetar Capital.
Let's now take a look at hedge fund activity in other stocks similar to Antares Pharma Inc (NASDAQ:ATRS). We will take a look at VirnetX Holding Corporation (NYSE:VHC), Donegal Group, Inc. (NASDAQ:DGICB), Celestica Inc. (NYSE:CLS), and Global Cord Blood Corp (NYSE:CO). This group of stocks' market caps resemble ATRS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VHC,3,819,2 DGICB,1,312,0 CLS,15,48453,2 CO,13,18445,1 Average,8,17007,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $23 million in ATRS's case. Celestica Inc. (NYSE:CLS) is the most popular stock in this table. On the other hand Donegal Group, Inc. (NASDAQ:DGICB) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Antares Pharma Inc (NASDAQ:ATRS) 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 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on ATRS, though not to the same extent, as the stock returned 21.2% in Q2 (through June 17th) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.