At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Clearside Biomedical, Inc. (NASDAQ:CLSD).
Hedge fund interest in Clearside Biomedical, Inc. (NASDAQ:CLSD) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that CLSD isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare CLSD to other stocks including Adamis Pharmaceuticals Corporation (NASDAQ:ADMP), Assertio Holdings, Inc. (NASDAQ:ASRT), and Navidea Biopharmaceuticals Inc (NYSE:NAVB) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are tons of signals market participants employ to appraise stocks. Some of the less known signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best money managers can beat their index-focused peers by a solid amount (see the details here).
John Overdeck of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. Keeping this in mind we're going to check out the key hedge fund action encompassing Clearside Biomedical, Inc. (NASDAQ:CLSD).
How have hedgies been trading Clearside Biomedical, Inc. (NASDAQ:CLSD)?
At third quarter's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2020. On the other hand, there were a total of 2 hedge funds with a bullish position in CLSD a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Acuta Capital Partners held the most valuable stake in Clearside Biomedical, Inc. (NASDAQ:CLSD), which was worth $0.9 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $0.8 million worth of shares. Two Sigma Advisors was 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 Acuta Capital Partners allocated the biggest weight to Clearside Biomedical, Inc. (NASDAQ:CLSD), around 0.26% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0008 percent of its 13F equity portfolio to CLSD.
Seeing as Clearside Biomedical, Inc. (NASDAQ:CLSD) has faced bearish sentiment from the aggregate hedge fund industry, it's safe to say that there exists a select few fund managers who were dropping their full holdings in the third quarter. Intriguingly, Israel Englander's Millennium Management said goodbye to the biggest investment of the "upper crust" of funds followed by Insider Monkey, comprising close to $0.3 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund cut about $0.3 million worth. These moves 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 - not necessarily in the same industry as Clearside Biomedical, Inc. (NASDAQ:CLSD) but similarly valued. These stocks are Adamis Pharmaceuticals Corporation (NASDAQ:ADMP), Assertio Holdings, Inc. (NASDAQ:ASRT), Navidea Biopharmaceuticals Inc (NYSE:NAVB), Rhinebeck Bancorp, Inc. (NASDAQ:RBKB), Oncolytics Biotech, Inc. (NASDAQ:ONCY), United Bancshares Inc. (NASDAQ:UBOH), and Marker Therapeutics, Inc. (NASDAQ:MRKR). This group of stocks' market caps resemble CLSD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ADMP,1,16,-1 ASRT,13,14432,-5 NAVB,3,443,1 RBKB,2,4432,0 ONCY,3,266,1 UBOH,1,6293,0 MRKR,2,414,-1 Average,3.6,3757,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.6 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $2 million in CLSD's case. Assertio Holdings, Inc. (NASDAQ:ASRT) is the most popular stock in this table. On the other hand Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) is the least popular one with only 1 bullish hedge fund positions. Clearside Biomedical, Inc. (NASDAQ:CLSD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CLSD is 19.3. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on CLSD as the stock returned 11.7% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.