Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th. What do these smart investors think about Palatin Technologies, Inc. (NYSEAMEX:PTN)?
Palatin Technologies, Inc. (NYSEAMEX:PTN) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds' portfolios at the end of the third quarter of 2018. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as CARBO Ceramics Inc. (NYSE:CRR), First Business Financial Services Inc (NASDAQ:FBIZ), and New America High Income Fund Inc. (NYSE:HYB) to gather more data points.
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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a gander at the recent hedge fund action encompassing Palatin Technologies, Inc. (NYSEAMEX:PTN).
What have hedge funds been doing with Palatin Technologies, Inc. (NYSEAMEX:PTN)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, no change from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards PTN over the last 13 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.
The largest stake in Palatin Technologies, Inc. (NYSEAMEX:PTN) was held by Arrowstreet Capital, which reported holding $1.4 million worth of stock at the end of September. It was followed by Alyeska Investment Group with a $0.5 million position. Other investors bullish on the company included Citadel Investment Group, Two Sigma Advisors, and Renaissance Technologies.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Gotham Asset Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was HighVista Strategies).
Let's now review hedge fund activity in other stocks similar to Palatin Technologies, Inc. (NYSEAMEX:PTN). These stocks are CARBO Ceramics Inc. (NYSE:CRR), First Business Financial Services Inc (NASDAQ:FBIZ), New America High Income Fund Inc. (NYSE:HYB), and Sanchez Energy Corp (NYSE:SN). All of these stocks' market caps resemble PTN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRR,9,13366,0 FBIZ,2,6004,0 HYB,1,5929,-1 SN,6,2649,-2 Average,4.5,6987,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $2 million in PTN's case. CARBO Ceramics Inc. (NYSE:CRR) is the most popular stock in this table. On the other hand New America High Income Fund Inc. (NYSE:HYB) is the least popular one with only 1 bullish hedge fund positions. Palatin Technologies, Inc. (NYSEAMEX:PTN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. In this regard CRR might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.