With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX).
Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) has seen a decrease in support from the world's most elite money managers in recent months. Our calculations also showed that PGNX isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? 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 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a glance at the latest hedge fund action encompassing Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX).
What have hedge funds been doing with Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX)?
At Q2's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PGNX over the last 16 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Point72 Asset Management was the largest shareholder of Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX), with a stake worth $36.1 million reported as of the end of March. Trailing Point72 Asset Management was Farallon Capital, which amassed a stake valued at $34.2 million. Royce & Associates, Highland Capital Management, and Ardsley Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Because Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) has witnessed falling interest from hedge fund managers, it's easy to see that there was a specific group of money managers who sold off their positions entirely last quarter. Interestingly, Renaissance Technologies dropped the biggest stake of all the hedgies monitored by Insider Monkey, valued at about $3.9 million in stock. Andrew Feldstein and Stephen Siderow's fund, Blue Mountain Capital, also cut its stock, about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX). We will take a look at Overstock.com, Inc. (NASDAQ:OSTK), GlycoMimetics, Inc. (NASDAQ:GLYC), The Bancorp, Inc. (NASDAQ:TBBK), and Gores Metropoulos, Inc. (NASDAQ:GMHI). This group of stocks' market valuations resemble PGNX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OSTK,9,13457,-4 GLYC,9,46257,1 TBBK,17,80825,1 GMHI,20,163482,2 Average,13.75,76005,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $88 million in PGNX's case. Gores Metropoulos, Inc. (NASDAQ:GMHI) is the most popular stock in this table. On the other hand Overstock.com, Inc. (NASDAQ:OSTK) is the least popular one with only 9 bullish hedge fund positions. Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately PGNX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PGNX investors were disappointed as the stock returned -18% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.