Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can't match. So should one consider investing in CEL-SCI Corporation (NYSE:CVM)? The smart money sentiment can provide an answer to this question.
CEL-SCI Corporation (NYSE:CVM) investors should be aware of a decrease in activity from the world's largest hedge funds recently. CEL-SCI Corporation (NYSE:CVM) was in 5 hedge funds' portfolios at the end of March. The all time high for this statistic is 6. Our calculations also showed that CVM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Today there are dozens of formulas investors employ to appraise stocks. A duo of the most innovative formulas are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the S&P 500 by a healthy amount (see the details here). 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 .
Joseph Edelman of Perceptive Advisors
Joseph Edelman of Perceptive Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 view the latest hedge fund action encompassing CEL-SCI Corporation (NYSE:CVM).
Do Hedge Funds Think CVM Is A Good Stock To Buy Now?
At first quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CVM over the last 23 quarters. With hedgies' capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of CEL-SCI Corporation (NYSE:CVM), with a stake worth $18.8 million reported as of the end of March. Trailing D E Shaw was Citadel Investment Group, which amassed a stake valued at $6 million. Sabby Capital, Ikarian Capital, and Citadel Investment Group 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 Sabby Capital allocated the biggest weight to CEL-SCI Corporation (NYSE:CVM), around 0.52% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, setting aside 0.05 percent of its 13F equity portfolio to CVM.
Because CEL-SCI Corporation (NYSE:CVM) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedgies who were dropping their full holdings by the end of the first quarter. At the top of the heap, Hal Mintz's Sabby Capital sold off the biggest investment of all the hedgies watched by Insider Monkey, valued at close to $3.6 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital was right behind this move, as the fund dumped about $0.3 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds by the end of the first quarter.
Let's go over hedge fund activity in other stocks similar to CEL-SCI Corporation (NYSE:CVM). These stocks are Triple-S Management Corp.(NYSE:GTS), Cooper-Standard Holdings Inc (NYSE:CPS), First Financial Corp (NASDAQ:THFF), Lydall, Inc. (NYSE:LDL), NeoPhotonics Corp (NYSE:NPTN), Hanmi Financial Corp (NASDAQ:HAFC), and Hingham Institution for Savings (NASDAQ:HIFS). This group of stocks' market valuations resemble CVM's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GTS,10,106043,-2 CPS,14,42382,-1 THFF,7,38549,-2 LDL,12,89447,-4 NPTN,17,77513,-1 HAFC,13,35667,0 HIFS,2,7472,1 Average,10.7,56725,-1.3 [/table]
As you can see these stocks had an average of 10.7 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $21 million in CVM's case. NeoPhotonics Corp (NYSE:NPTN) is the most popular stock in this table. On the other hand Hingham Institution for Savings (NASDAQ:HIFS) is the least popular one with only 2 bullish hedge fund positions. CEL-SCI Corporation (NYSE:CVM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CVM is 39. 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 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on CVM as the stock returned 45.8% since the end of the first quarter (through 6/18) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
