The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Nantkwest Inc (NASDAQ:NK).
Is Nantkwest Inc (NASDAQ:NK) an excellent stock to buy now? Prominent investors are getting less bullish. The number of long hedge fund positions dropped by 1 lately. Our calculations also showed that NK isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). NK was in 6 hedge funds' portfolios at the end of the third quarter of 2019. There were 7 hedge funds in our database with NK 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.
To the average investor there are several signals stock market investors can use to grade their holdings. Some of the best signals are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace their index-focused peers by a very impressive margin (see the details here).
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/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. Now let's take a gander at the key hedge fund action surrounding Nantkwest Inc (NASDAQ:NK).
What have hedge funds been doing with Nantkwest Inc (NASDAQ:NK)?
At Q3's end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NK over the last 17 quarters. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Nantkwest Inc (NASDAQ:NK), with a stake worth $1.9 million reported as of the end of September. Trailing Renaissance Technologies was Wildcat Capital Management, which amassed a stake valued at $0.6 million. Millennium Management, Horizon Asset Management, and LMR Partners 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 Wildcat Capital Management allocated the biggest weight to Nantkwest Inc (NASDAQ:NK), around 0.25% of its 13F portfolio. Horizon Asset Management is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to NK.
Since Nantkwest Inc (NASDAQ:NK) has witnessed a decline in interest from the smart money, it's easy to see that there exists a select few hedge funds who sold off their full holdings heading into Q4. Intriguingly, Donald Sussman's Paloma Partners cut the largest investment of all the hedgies monitored by Insider Monkey, comprising an estimated $0.1 million in stock. David E. Shaw's fund, D E Shaw, also dropped its stock, about $0 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds heading into Q4.
Let's also examine hedge fund activity in other stocks similar to Nantkwest Inc (NASDAQ:NK). We will take a look at Novavax, Inc. (NASDAQ:NVAX), PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), Rhinebeck Bancorp, Inc. (NASDAQ:RBKB), and Tanzanian Royalty Exploration Corp. (US) (NYSE:TRX). This group of stocks' market values are similar to NK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NVAX,7,1967,4 PHAS,10,16101,2 RBKB,2,7573,0 TRX,1,17,-1 Average,5,6415,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $3 million in NK's case. PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS) is the most popular stock in this table. On the other hand Tanzanian Royalty Exploration Corp. (US) (NYSE:TRX) is the least popular one with only 1 bullish hedge fund positions. Nantkwest Inc (NASDAQ:NK) 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 NK as the stock returned 41% 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.