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Is Silverback Therapeutics, Inc. (SBTX) A Good Stock To Buy?

·6 min read

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Silverback Therapeutics, Inc. (NASDAQ:SBTX).

Is SBTX a good stock to buy? Silverback Therapeutics, Inc. (NASDAQ:SBTX) has experienced a decrease in support from the world's most elite money managers recently. Silverback Therapeutics, Inc. (NASDAQ:SBTX) was in 19 hedge funds' portfolios at the end of March. The all time high for this statistic is 24. Our calculations also showed that SBTX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

To most traders, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are over 8000 funds trading at the moment, Our experts look at the moguls of this group, around 850 funds. These hedge fund managers administer most of the smart money's total asset base, and by following their matchless stock picks, Insider Monkey has unsheathed a number of investment strategies that have historically defeated Mr. Market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Oleg Nodelman EcoR1 Capital
Oleg Nodelman EcoR1 Capital

Oleg Nodelman of EcoR1 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. With all of this in mind let's take a gander at the recent hedge fund action encompassing Silverback Therapeutics, Inc. (NASDAQ:SBTX).

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

At first quarter's end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in SBTX a year ago. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Is SBTX A Good Stock To Buy?
Is SBTX A Good Stock To Buy?

Among these funds, OrbiMed Advisors held the most valuable stake in Silverback Therapeutics, Inc. (NASDAQ:SBTX), which was worth $381.4 million at the end of the fourth quarter. On the second spot was EcoR1 Capital which amassed $110.5 million worth of shares. RA Capital Management, Nantahala Capital Management, and Cormorant Asset Management 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 EcoR1 Capital allocated the biggest weight to Silverback Therapeutics, Inc. (NASDAQ:SBTX), around 4.9% of its 13F portfolio. OrbiMed Advisors is also relatively very bullish on the stock, dishing out 3.57 percent of its 13F equity portfolio to SBTX.

Seeing as Silverback Therapeutics, Inc. (NASDAQ:SBTX) has witnessed declining sentiment from hedge fund managers, it's safe to say that there lies a certain "tier" of fund managers that elected to cut their entire stakes last quarter. At the top of the heap, Ken Griffin's Citadel Investment Group dumped the largest investment of the 750 funds followed by Insider Monkey, comprising close to $6.4 million in stock. Jeffrey Jay and David Kroin's fund, Great Point Partners, also sold off its stock, about $3.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds last quarter.

Let's go over hedge fund activity in other stocks similar to Silverback Therapeutics, Inc. (NASDAQ:SBTX). We will take a look at Ranpak Holdings Corp (NYSE:PACK), Uniqure NV (NASDAQ:QURE), ACM Research, Inc. (NASDAQ:ACMR), Quotient Technology Inc (NYSE:QUOT), Ichor Holdings Ltd. (NASDAQ:ICHR), Industrial Logistics Properties Trust (NASDAQ:ILPT), and Travere Therapeutics, Inc. (NASDAQ:TVTX). This group of stocks' market values are closest to SBTX's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PACK,14,651146,1 QURE,25,340984,-10 ACMR,19,213388,3 QUOT,25,580993,6 ICHR,12,69845,-12 ILPT,11,8780,3 TVTX,27,661871,0 Average,19,361001,-1.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $361 million. That figure was $708 million in SBTX's case. Travere Therapeutics, Inc. (NASDAQ:TVTX) is the most popular stock in this table. On the other hand Industrial Logistics Properties Trust (NASDAQ:ILPT) is the least popular one with only 11 bullish hedge fund positions. Silverback Therapeutics, Inc. (NASDAQ:SBTX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SBTX is 48.8. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately SBTX wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SBTX investors were disappointed as the stock returned -29.9% since the end of March (through 7/16) 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.