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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 third 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 5 years and analyze what the smart money thinks of Protagonist Therapeutics, Inc. (NASDAQ:PTGX) based on that data.
Is PTGX a good stock to buy now? Protagonist Therapeutics, Inc. (NASDAQ:PTGX) investors should pay attention to an increase in hedge fund interest recently. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) was in 13 hedge funds' portfolios at the end of September. The all time high for this statistic is 17. Our calculations also showed that PTGX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Robert Atchinson of Adage Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let's take a glance at the new hedge fund action encompassing Protagonist Therapeutics, Inc. (NASDAQ:PTGX).
Do Hedge Funds Think PTGX Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PTGX over the last 21 quarters. With the smart money's capital changing hands, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in Protagonist Therapeutics, Inc. (NASDAQ:PTGX) was held by Farallon Capital, which reported holding $53.8 million worth of stock at the end of September. It was followed by Adage Capital Management with a $49.3 million position. Other investors bullish on the company included Biotechnology Value Fund / BVF Inc, Consonance Capital Management, and Baker Bros. Advisors. In terms of the portfolio weights assigned to each position Consonance Capital Management allocated the biggest weight to Protagonist Therapeutics, Inc. (NASDAQ:PTGX), around 5.64% of its 13F portfolio. Biotechnology Value Fund / BVF Inc is also relatively very bullish on the stock, dishing out 2.53 percent of its 13F equity portfolio to PTGX.
Consequently, some big names have jumped into Protagonist Therapeutics, Inc. (NASDAQ:PTGX) headfirst. Consonance Capital Management, managed by Mitchell Blutt, initiated the biggest position in Protagonist Therapeutics, Inc. (NASDAQ:PTGX). Consonance Capital Management had $46.3 million invested in the company at the end of the quarter. Cliff Asness's AQR Capital Management also initiated a $0.4 million position during the quarter. The only other fund with a brand new PTGX position is Parvinder Thiara's Athanor Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Protagonist Therapeutics, Inc. (NASDAQ:PTGX) but similarly valued. We will take a look at Cohu, Inc. (NASDAQ:COHU), German American Bancorp., Inc. (NASDAQ:GABC), Collegium Pharmaceutical Inc (NASDAQ:COLL), Ranpak Holdings Corp (NYSE:PACK), Controladora Vuela Co Avcn SA CV (NYSE:VLRS), Scholastic Corp (NASDAQ:SCHL), and GoPro Inc (NASDAQ:GPRO). This group of stocks' market caps resemble PTGX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position COHU,8,47643,-4 GABC,4,12514,0 COLL,17,227881,-3 PACK,14,317636,0 VLRS,9,75839,0 SCHL,14,40578,1 GPRO,14,292314,4 Average,11.4,144915,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $145 million. That figure was $277 million in PTGX's case. Collegium Pharmaceutical Inc (NASDAQ:COLL) is the most popular stock in this table. On the other hand German American Bancorp., Inc. (NASDAQ:GABC) is the least popular one with only 4 bullish hedge fund positions. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PTGX is 64.6. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on PTGX as the stock returned 25.1% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.