Hedge Funds Never Been Less Bullish On Nabriva Therapeutics plc (NBRV)
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Nabriva Therapeutics plc (NASDAQ:NBRV).
Nabriva Therapeutics plc (NASDAQ:NBRV) investors should be aware of a decrease in hedge fund sentiment recently. Nabriva Therapeutics plc (NASDAQ:NBRV) was in 4 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 12. Our calculations also showed that NBRV isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Harding of Winton Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we're going to take a glance at the new hedge fund action surrounding Nabriva Therapeutics plc (NASDAQ:NBRV).
Do Hedge Funds Think NBRV Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in NBRV a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Alan Frazier's Frazier Healthcare Partners has the biggest position in Nabriva Therapeutics plc (NASDAQ:NBRV), worth close to $0.7 million, amounting to 0.1% of its total 13F portfolio. On Frazier Healthcare Partners's heels is Sabby Capital, led by Hal Mintz, holding a $0.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish contain Renaissance Technologies, Ken Griffin's Citadel Investment Group and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Frazier Healthcare Partners allocated the biggest weight to Nabriva Therapeutics plc (NASDAQ:NBRV), around 0.06% of its 13F portfolio. Sabby Capital is also relatively very bullish on the stock, setting aside 0.05 percent of its 13F equity portfolio to NBRV.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Winton Capital Management. 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 NBRV 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 Nabriva Therapeutics plc (NASDAQ:NBRV) but similarly valued. These stocks are Aehr Test Systems (NASDAQ:AEHR), The LGL Group, Inc. (NYSE:LGL), Rezolute, Inc. (NASDAQ:RZLT), Predictive Oncology Inc. (NASDAQ:POAI), Evoke Pharma Inc (NASDAQ:EVOK), Kaspien Holdings Inc. (NASDAQ:KSPN), and Dawson Geophysical Company (NASDAQ:DWSN). This group of stocks' market caps are similar to NBRV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AEHR,1,2641,-3 LGL,3,9596,0 RZLT,5,5909,1 POAI,2,3200,2 EVOK,2,2645,-1 KSPN,1,2508,0 DWSN,3,5317,-1 Average,2.4,4545,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.4 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $1 million in NBRV's case. Rezolute, Inc. (NASDAQ:RZLT) is the most popular stock in this table. On the other hand Aehr Test Systems (NASDAQ:AEHR) is the least popular one with only 1 bullish hedge fund positions. Nabriva Therapeutics plc (NASDAQ:NBRV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NBRV is 51.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately NBRV wasn't nearly as popular as these 5 stocks and hedge funds that were betting on NBRV were disappointed as the stock returned -13.3% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
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