The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Milestone Pharmaceuticals Inc. (NASDAQ:MIST) based on those filings.
Is Milestone Pharmaceuticals Inc. (NASDAQ:MIST) going to take off soon? The smart money is becoming less hopeful. The number of bullish hedge fund positions retreated by 2 lately. Our calculations also showed that MIST 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). MIST was in 5 hedge funds' portfolios at the end of March. There were 7 hedge funds in our database with MIST holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
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[caption id="attachment_27676" align="aligncenter" width="355"] Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 peek at the key hedge fund action surrounding Milestone Pharmaceuticals Inc. (NASDAQ:MIST).
Hedge fund activity in Milestone Pharmaceuticals Inc. (NASDAQ:MIST)
Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in MIST over the last 18 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Ghost Tree Capital was the largest shareholder of Milestone Pharmaceuticals Inc. (NASDAQ:MIST), with a stake worth $0.4 million reported as of the end of September. Trailing Ghost Tree Capital was Millennium Management, which amassed a stake valued at $0.4 million. Sphera Global Healthcare Fund, Prosight Capital, and Renaissance Technologies 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 Ghost Tree Capital allocated the biggest weight to Milestone Pharmaceuticals Inc. (NASDAQ:MIST), around 0.1% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to MIST.
Since Milestone Pharmaceuticals Inc. (NASDAQ:MIST) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there lies a certain "tier" of fund managers that elected to cut their entire stakes heading into Q4. It's worth mentioning that Phill Gross and Robert Atchinson's Adage Capital Management dropped the largest investment of the "upper crust" of funds followed by Insider Monkey, worth an estimated $9.6 million in stock. Samuel Isaly's fund, OrbiMed Advisors, also said goodbye to its stock, about $5.8 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 2 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Milestone Pharmaceuticals Inc. (NASDAQ:MIST) but similarly valued. We will take a look at Home Federal Bancorp Inc of Louisiana (NASDAQ:HFBL), Smart Sand, Inc. (NASDAQ:SND), Canterbury Park Holding Corporation (NASDAQ:CPHC), and ConforMIS, Inc. (NASDAQ:CFMS). This group of stocks' market valuations match MIST's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HFBL,1,637,0 SND,4,1207,-5 CPHC,1,4598,0 CFMS,7,6700,1 Average,3.25,3286,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $1 million in MIST's case. ConforMIS, Inc. (NASDAQ:CFMS) is the most popular stock in this table. On the other hand Home Federal Bancorp Inc of Louisiana (NASDAQ:HFBL) is the least popular one with only 1 bullish hedge fund positions. Milestone Pharmaceuticals Inc. (NASDAQ:MIST) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on MIST as the stock returned 71.7% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.