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Hedge Funds Never Been Less Bullish On MannKind Corporation (MNKD)

Abigail Fisher

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of MannKind Corporation (NASDAQ:MNKD) based on that data.

MannKind Corporation (NASDAQ:MNKD) was in 5 hedge funds' portfolios at the end of the first quarter of 2020. MNKD investors should pay attention to a decrease in enthusiasm from smart money recently. There were 9 hedge funds in our database with MNKD holdings at the end of the previous quarter. Our calculations also showed that MNKD 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 21st century investor’s toolkit there are numerous indicators stock traders can use to appraise their holdings. A couple of the best indicators are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can trounce the market by a very impressive amount (see the details here).

[caption id="attachment_365194" align="aligncenter" width="398"] David E. Shaw of D.E. Shaw[/caption]

David E. Shaw of D.E. Shaw

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 view the latest hedge fund action surrounding MannKind Corporation (NASDAQ:MNKD).

Hedge fund activity in MannKind Corporation (NASDAQ:MNKD)

At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -44% from the fourth quarter of 2019. By comparison, 7 hedge funds held shares or bullish call options in MNKD a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Parkman Healthcare Partners held the most valuable stake in MannKind Corporation (NASDAQ:MNKD), which was worth $0.9 million at the end of the third quarter. On the second spot was Millennium Management which amassed $0.7 million worth of shares. D E Shaw, Citadel Investment Group, and Citadel Investment Group 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 Parkman Healthcare Partners allocated the biggest weight to MannKind Corporation (NASDAQ:MNKD), around 0.43% of its 13F portfolio. HighVista Strategies is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to MNKD.

Due to the fact that MannKind Corporation (NASDAQ:MNKD) has faced bearish sentiment from hedge fund managers, it's safe to say that there is a sect of fund managers that elected to cut their positions entirely heading into Q4. Interestingly, William C. Martin's Raging Capital Management sold off the largest investment of all the hedgies tracked by Insider Monkey, valued at about $3.9 million in stock. Matt Sirovich and Jeremy Mindich's fund, Scopia Capital, also sold off its stock, about $1.2 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 4 funds heading into Q4.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as MannKind Corporation (NASDAQ:MNKD) but similarly valued. These stocks are Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), DXP Enterprises Inc (NASDAQ:DXPE), Intelsat S.A. (NYSE:I), and CURO Group Holdings Corp. (NYSE:CURO). This group of stocks' market values match MNKD's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SMBC,3,10924,-1 DXPE,7,25787,-2 I,23,73314,-26 CURO,14,24996,-4 Average,11.75,33755,-8.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $3 million in MNKD's case. Intelsat S.A. (NYSE:I) is the most popular stock in this table. On the other hand Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is the least popular one with only 3 bullish hedge fund positions. MannKind Corporation (NASDAQ:MNKD) is not the least popular stock in this group but hedge fund interest is still below 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on MNKD as the stock returned 46.6% during the second quarter and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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