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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 Anika Therapeutics, Inc. (NASDAQ:ANIK).
Anika Therapeutics, Inc. (NASDAQ:ANIK) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds' portfolios at the end of the first quarter of 2020. At the end of this article we will also compare ANIK to other stocks including GoPro Inc (NASDAQ:GPRO), Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), and American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.
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Jeffrey Bronchick of Cove Street Capital[/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 take a look at the new hedge fund action surrounding Anika Therapeutics, Inc. (NASDAQ:ANIK).
What have hedge funds been doing with Anika Therapeutics, Inc. (NASDAQ:ANIK)?
At Q1's end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in ANIK over the last 18 quarters. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Anika Therapeutics, Inc. (NASDAQ:ANIK), with a stake worth $21.6 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $6.9 million. AQR Capital Management, Two Sigma Advisors, 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 Diker Management allocated the biggest weight to Anika Therapeutics, Inc. (NASDAQ:ANIK), around 0.27% of its 13F portfolio. Cove Street Capital is also relatively very bullish on the stock, earmarking 0.12 percent of its 13F equity portfolio to ANIK.
Due to the fact that Anika Therapeutics, Inc. (NASDAQ:ANIK) has witnessed falling interest from the smart money, it's safe to say that there was a specific group of hedge funds who sold off their entire stakes heading into Q4. Interestingly, Paul Tudor Jones's Tudor Investment Corp dropped the biggest position of the 750 funds monitored by Insider Monkey, valued at an estimated $1.6 million in stock. Michael Gelband's fund, ExodusPoint Capital, also sold off its stock, about $0.6 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Anika Therapeutics, Inc. (NASDAQ:ANIK). We will take a look at GoPro Inc (NASDAQ:GPRO), Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), and Bank of Marin Bancorp (NASDAQ:BMRC). All of these stocks' market caps are closest to ANIK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GPRO,9,199300,-1 BLX,3,30130,0 AXL,22,44333,-1 BMRC,6,13433,0 Average,10,71799,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $49 million in ANIK's case. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX) is the least popular one with only 3 bullish hedge fund positions. Anika Therapeutics, Inc. (NASDAQ:ANIK) is not the most popular stock in this group but hedge fund interest is still above average. 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 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 beat the market by 15.9 percentage points. Unfortunately ANIK wasn't nearly as popular as these 10 stocks and hedge funds that were betting on ANIK were disappointed as the stock returned 20.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.