We at Insider Monkey have gone over 752 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 September 30th. In this article, we look at what those funds think of DiaMedica Therapeutics Inc. (NASDAQ:DMAC) based on that data.
DiaMedica Therapeutics Inc. (NASDAQ:DMAC) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds' portfolios at the end of September. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Verb Technology Company, Inc. (NASDAQ:VERB), Trinity Biotech plc (NASDAQ:TRIB), and Estre Ambiental, Inc. (NASDAQ:ESTR) to gather more data points. Our calculations also showed that DMAC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_27676" align="aligncenter" width="355"] Israel Englander of Millennium Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. With all of this in mind let's go over the latest hedge fund action encompassing DiaMedica Therapeutics Inc. (NASDAQ:DMAC).
How have hedgies been trading DiaMedica Therapeutics Inc. (NASDAQ:DMAC)?
At Q3's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards DMAC over the last 17 quarters. With the smart money's capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mark Broach's Manatuck Hill Partners has the most valuable position in DiaMedica Therapeutics Inc. (NASDAQ:DMAC), worth close to $0.6 million, comprising 0.3% of its total 13F portfolio. The second most bullish fund manager is Granite Point Capital, managed by Warren Lammert, which holds a $0.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Charles Davidson and Joseph Jacobs's Wexford Capital, Israel Englander's Millennium Management and . In terms of the portfolio weights assigned to each position Manatuck Hill Partners allocated the biggest weight to DiaMedica Therapeutics Inc. (NASDAQ:DMAC), around 0.31% of its 13F portfolio. Granite Point Capital is also relatively very bullish on the stock, earmarking 0.07 percent of its 13F equity portfolio to DMAC.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as DiaMedica Therapeutics Inc. (NASDAQ:DMAC) but similarly valued. These stocks are Verb Technology Company, Inc. (NASDAQ:VERB), Trinity Biotech plc (NASDAQ:TRIB), Estre Ambiental, Inc. (NASDAQ:ESTR), and Ossen Innovation Co Ltd (NASDAQ:OSN). This group of stocks' market values are closest to DMAC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VERB,4,274,2 TRIB,4,1921,0 ESTR,6,876,0 OSN,1,152,0 Average,3.75,806,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.75 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $1 million in DMAC's case. Estre Ambiental, Inc. (NASDAQ:ESTR) is the most popular stock in this table. On the other hand Ossen Innovation Co Ltd (NASDAQ:OSN) is the least popular one with only 1 bullish hedge fund positions. DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on DMAC as the stock returned 52.2% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.