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Is Kintara Therapeutics (KTRA) A Good Stock To Buy Now?

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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 fourth 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 6 years and analyze what the smart money thinks of Kintara Therapeutics, Inc. (NASDAQ:KTRA) based on that data.

Is KTRA a good stock to buy? Hedge funds were becoming more confident. The number of long hedge fund bets inched up by 1 in recent months. Kintara Therapeutics, Inc. (NASDAQ:KTRA) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KTRA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Wil Harkey Nantahala Capital
Wil Harkey Nantahala Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we're going to analyze the recent hedge fund action regarding Kintara Therapeutics, Inc. (NASDAQ:KTRA).

Do Hedge Funds Think KTRA Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the previous quarter. By comparison, 1 hedge funds held shares or bullish call options in KTRA 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.

Is KTRA A Good Stock To Buy?
Is KTRA A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, holds the biggest position in Kintara Therapeutics, Inc. (NASDAQ:KTRA). Nantahala Capital Management has a $1.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Nantahala Capital Management's heels is Ken Griffin of Citadel Investment Group, with a $0.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Nantahala Capital Management allocated the biggest weight to Kintara Therapeutics, Inc. (NASDAQ:KTRA), around 0.05% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0001 percent of its 13F equity portfolio to KTRA.

As industrywide interest jumped, specific money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in Kintara Therapeutics, Inc. (NASDAQ:KTRA). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Kintara Therapeutics, Inc. (NASDAQ:KTRA) but similarly valued. These stocks are Sotherly Hotels Inc (NASDAQ:SOHO), ARCA biopharma, Inc. (NASDAQ:ABIO), Profire Energy, Inc. (NASDAQ:PFIE), MIND C.T.I. Ltd. (NASDAQ:MNDO), NuZee, Inc. (NASDAQ:NUZE), 1847 Goedeker Inc. (NYSE:GOED), and Reviva Pharmaceuticals Holdings, Inc. (NASDAQ:RVPH). This group of stocks' market values match KTRA's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SOHO,2,924,0 ABIO,2,133,1 PFIE,5,5265,0 MNDO,3,547,1 NUZE,3,3560,3 GOED,1,127,1 RVPH,5,3854,2 Average,3,2059,1.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $2 million in KTRA's case. Profire Energy, Inc. (NASDAQ:PFIE) is the most popular stock in this table. On the other hand 1847 Goedeker Inc. (NYSE:GOED) is the least popular one with only 1 bullish hedge fund positions. Kintara Therapeutics, Inc. (NASDAQ:KTRA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KTRA is 61. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately KTRA wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); KTRA investors were disappointed as the stock returned 2.9% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.

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