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 Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) based on that data.
Is Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) ready to rally soon? Investors who are in the know are betting on the stock. The number of long hedge fund positions advanced by 8 recently. Our calculations also showed that SNDX 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). SNDX was in 19 hedge funds' portfolios at the end of March. There were 11 hedge funds in our database with SNDX holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 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.
[caption id="attachment_758402" align="aligncenter" width="392"] William Leland Edwards of Palo Alto Investors[/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 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 we're going to go over the recent hedge fund action encompassing Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX).
What does smart money think about Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX)?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 73% from the fourth quarter of 2019. By comparison, 7 hedge funds held shares or bullish call options in SNDX a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, holds the number one position in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX). Biotechnology Value Fund / BVF Inc has a $23.5 million position in the stock, comprising 2.2% of its 13F portfolio. On Biotechnology Value Fund / BVF Inc's heels is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $11 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish comprise Alan Frazier's Frazier Healthcare Partners, Ari Zweiman's 683 Capital Partners and Renaissance Technologies. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX), around 2.19% of its 13F portfolio. Frazier Healthcare Partners is also relatively very bullish on the stock, setting aside 1.23 percent of its 13F equity portfolio to SNDX.
As one would reasonably expect, key money managers have jumped into Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) headfirst. Frazier Healthcare Partners, managed by Alan Frazier, assembled the largest position in Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX). Frazier Healthcare Partners had $10.9 million invested in the company at the end of the quarter. Ken Greenberg and David Kim's Ghost Tree Capital also made a $2.7 million investment in the stock during the quarter. The following funds were also among the new SNDX investors: Doron Breen and Mori Arkin's Sphera Global Healthcare Fund, William Leland Edwards's Palo Alto Investors, and Paul Marshall and Ian Wace's Marshall Wace LLP.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) but similarly valued. We will take a look at Puma Biotechnology Inc (NASDAQ:PBYI), Betterware de Mexico, S.A.P.I. de C.V. (NASDAQ:BWMX), AMC Entertainment Holdings Inc (NYSE:AMC), and Enerplus Corp (NYSE:ERF). This group of stocks' market values are similar to SNDX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PBYI,20,100494,3 BWMX,2,622,2 AMC,14,32247,-5 ERF,15,45932,-5 Average,12.75,44824,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $74 million in SNDX's case. Puma Biotechnology Inc (NASDAQ:PBYI) is the most popular stock in this table. On the other hand Betterware de Mexico, S.A.P.I. de C.V. (NASDAQ:BWMX) is the least popular one with only 2 bullish hedge fund positions. Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) 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 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on SNDX as the stock returned 39.6% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.