It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren't usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index's returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you'd fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of 4 percentage points during the first 9 months of 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That's why we are going to go over recent hedge fund activity in Antares Pharma Inc (NASDAQ:ATRS).
Is Antares Pharma Inc (NASDAQ:ATRS) a buy here? Money managers are becoming less hopeful. The number of bullish hedge fund bets dropped by 2 recently. Our calculations also showed that ATRS isn't among the 30 most popular stocks among hedge funds (see the video below). ATRS was in 10 hedge funds' portfolios at the end of the second quarter of 2019. There were 12 hedge funds in our database with ATRS positions at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a lot of indicators shareholders put to use to value their stock investments. Two of the less utilized indicators are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform their index-focused peers by a significant margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a gander at the recent hedge fund action surrounding Antares Pharma Inc (NASDAQ:ATRS).
How are hedge funds trading Antares Pharma Inc (NASDAQ:ATRS)?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in ATRS a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Armistice Capital was the largest shareholder of Antares Pharma Inc (NASDAQ:ATRS), with a stake worth $19.7 million reported as of the end of March. Trailing Armistice Capital was Broadfin Capital, which amassed a stake valued at $5.7 million. Marshall Wace LLP, Two Sigma Advisors, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Antares Pharma Inc (NASDAQ:ATRS) has witnessed a decline in interest from the entirety of the hedge funds we track, it's safe to say that there is a sect of funds that slashed their entire stakes heading into Q3. Intriguingly, Israel Englander's Millennium Management dropped the biggest stake of all the hedgies monitored by Insider Monkey, worth an estimated $0.8 million in stock, and David Harding's Winton Capital Management was right behind this move, as the fund sold off about $0.1 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 2 funds heading into Q3.
Let's now review hedge fund activity in other stocks similar to Antares Pharma Inc (NASDAQ:ATRS). We will take a look at New Gold Inc. (NYSE:NGD), AGM Group Holdings Inc. (NASDAQ:AGMH), Re/Max Holdings Inc (NYSE:RMAX), and Crawford & Company (NYSE:CRD). This group of stocks' market values are similar to ATRS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NGD,13,62467,0 AGMH,1,210,1 RMAX,10,60021,4 CRD,11,37471,2 Average,8.75,40042,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $33 million in ATRS's case. New Gold Inc. (NYSE:NGD) is the most popular stock in this table. On the other hand AGM Group Holdings Inc. (NASDAQ:AGMH) is the least popular one with only 1 bullish hedge fund positions. Antares Pharma Inc (NASDAQ:ATRS) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on ATRS, though not to the same extent, as the stock returned 1.8% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.