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 Abeona Therapeutics Inc (NASDAQ:ABEO) based on that data.
Is Abeona Therapeutics Inc (NASDAQ:ABEO) undervalued? Hedge funds are taking a pessimistic view. The number of long hedge fund positions went down by 3 recently. Our calculations also showed that ABEO 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 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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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_338175" align="aligncenter" width="392"] Felix Baker of Baker Bros.[/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 view the recent hedge fund action surrounding Abeona Therapeutics Inc (NASDAQ:ABEO).
How are hedge funds trading Abeona Therapeutics Inc (NASDAQ:ABEO)?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ABEO over the last 18 quarters. 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 publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Great Point Partners, managed by Jeffrey Jay and David Kroin, holds the largest position in Abeona Therapeutics Inc (NASDAQ:ABEO). Great Point Partners has a $15.1 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which holds a $11.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish consist of Fred Knoll's Knoll Capital Management, Steve Cohen's Point72 Asset Management and Julian Baker and Felix Baker's Baker Bros. Advisors. In terms of the portfolio weights assigned to each position Knoll Capital Management allocated the biggest weight to Abeona Therapeutics Inc (NASDAQ:ABEO), around 5.64% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, setting aside 1.58 percent of its 13F equity portfolio to ABEO.
Since Abeona Therapeutics Inc (NASDAQ:ABEO) has experienced falling interest from the smart money, we can see that there lies a certain "tier" of money managers who sold off their entire stakes by the end of the first quarter. It's worth mentioning that Farallon Capital dumped the biggest position of all the hedgies followed by Insider Monkey, totaling about $6.5 million in stock. Ryan Tolkin (CIO)'s fund, Schonfeld Strategic Advisors, also dumped its stock, about $4.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds by the end of the first quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Abeona Therapeutics Inc (NASDAQ:ABEO) but similarly valued. These stocks are Cooper-Standard Holdings Inc (NYSE:CPS), Lands' End, Inc. (NASDAQ:LE), NantHealth, Inc. (NASDAQ:NH), and Allegro Merger Corp. (NASDAQ:ALGR). This group of stocks' market values are closest to ABEO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CPS,11,13018,-3 LE,8,27863,-2 NH,4,1315,0 ALGR,8,18706,-3 Average,7.75,15226,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $55 million in ABEO's case. Cooper-Standard Holdings Inc (NYSE:CPS) is the most popular stock in this table. On the other hand NantHealth, Inc. (NASDAQ:NH) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Abeona Therapeutics Inc (NASDAQ:ABEO) is more popular among hedge funds. 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 returned 13.4% in 2020 through June 22nd but still managed to beat the market by 15.9 percentage points. Hedge funds were also right about betting on ABEO as the stock returned 41.9% so far in Q2 (through June 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.