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Is Tyme Technologies, Inc. (TYME) Going to Burn These Hedge Funds?

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Abigail Fisher
·6 min read
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In this article we are going to use hedge fund sentiment as a tool and determine whether Tyme Technologies, Inc. (NASDAQ:TYME) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Tyme Technologies, Inc. (NASDAQ:TYME) has seen a decrease in hedge fund sentiment of late. Tyme Technologies, Inc. (NASDAQ:TYME) was in 3 hedge funds' portfolios at the end of September. The all time high for this statistics is 6. Our calculations also showed that TYME 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.

Today there are a multitude of signals market participants have at their disposal to value their stock investments. A pair of the most underrated signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best money managers can outperform the broader indices by a superb amount (see the details here).

Sander Gerber of Hudson Bay Capital
Sander Gerber of Hudson Bay Capital

Sander Gerber of Hudson Bay Capital

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 10 most profitable companies in the world 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. With all of this in mind let's review the key hedge fund action regarding Tyme Technologies, Inc. (NASDAQ:TYME).

What does smart money think about Tyme Technologies, Inc. (NASDAQ:TYME)?

At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -50% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in TYME a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Among these funds, Healthcare Value Capital held the most valuable stake in Tyme Technologies, Inc. (NASDAQ:TYME), which was worth $2.1 million at the end of the third quarter. On the second spot was Hudson Bay Capital Management which amassed $1.9 million worth of shares. Two Sigma Advisors was 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 Healthcare Value Capital allocated the biggest weight to Tyme Technologies, Inc. (NASDAQ:TYME), around 7.03% of its 13F portfolio. Hudson Bay Capital Management is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to TYME.

Judging by the fact that Tyme Technologies, Inc. (NASDAQ:TYME) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there were a few hedgies that slashed their entire stakes heading into Q4. Intriguingly, Renaissance Technologies dropped the biggest investment of the "upper crust" of funds tracked by Insider Monkey, valued at an estimated $0.2 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund dumped about $0 million worth. These moves are interesting, as total hedge fund interest fell by 3 funds heading into Q4.

Let's go over hedge fund activity in other stocks similar to Tyme Technologies, Inc. (NASDAQ:TYME). These stocks are VivoPower International PLC (NASDAQ:VVPR), Global Ship Lease, Inc. (NYSE:GSL), Unity Bancorp, Inc. (NASDAQ:UNTY), The Bank of Princeton (NASDAQ:BPRN), Middlefield Banc Corp. (NASDAQ:MBCN), Capital Product Partners L.P. (NASDAQ:CPLP), and Hawthorn Bancshares, Inc. (NASDAQ:HWBK). All of these stocks' market caps match TYME's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VVPR,2,3202,1 GSL,3,13492,-1 UNTY,7,15357,2 BPRN,2,8608,0 MBCN,3,11381,0 CPLP,4,975,1 HWBK,1,1330,0 Average,3.1,7764,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.1 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $4 million in TYME's case. Unity Bancorp, Inc. (NASDAQ:UNTY) is the most popular stock in this table. On the other hand Hawthorn Bancshares, Inc. (NASDAQ:HWBK) is the least popular one with only 1 bullish hedge fund positions. Tyme Technologies, Inc. (NASDAQ:TYME) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TYME is 33.7. 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 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 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately TYME wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TYME investors were disappointed as the stock returned -4.5% since the end of September (through 11/23) 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 most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.

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