Matinas Biopharma Holdings, Inc. (MTNB) Fell Out Of Favor With Hedge Funds

Asma UL Husna
·6 min read

After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Matinas Biopharma Holdings, Inc. (NYSE:MTNB).

Matinas Biopharma Holdings, Inc. (NYSE:MTNB) investors should be aware of a decrease in hedge fund sentiment in recent months. Matinas Biopharma Holdings, Inc. (NYSE:MTNB) was in 6 hedge funds' portfolios at the end of September. The all time high for this statistics is 10. There were 10 hedge funds in our database with MTNB positions at the end of the second quarter. Our calculations also showed that MTNB 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

David Harding
David Harding

David Harding of Winton 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. With all of this in mind we're going to go over the fresh hedge fund action regarding Matinas Biopharma Holdings, Inc. (NYSE:MTNB).

What have hedge funds been doing with Matinas Biopharma Holdings, Inc. (NYSE:MTNB)?

At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -40% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards MTNB over the last 21 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Vivo Capital, managed by Albert Cha and Frank Kung, holds the most valuable position in Matinas Biopharma Holdings, Inc. (NYSE:MTNB). Vivo Capital has a $8.6 million position in the stock, comprising 0.5% of its 13F portfolio. On Vivo Capital's heels is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $0.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism comprise John Orrico's Water Island Capital, David Harding's Winton Capital Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Vivo Capital allocated the biggest weight to Matinas Biopharma Holdings, Inc. (NYSE:MTNB), around 0.5% of its 13F portfolio. Water Island Capital is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to MTNB.

Since Matinas Biopharma Holdings, Inc. (NYSE:MTNB) has faced bearish sentiment from the entirety of the hedge funds we track, it's safe to say that there is a sect of money managers who sold off their positions entirely by the end of the third quarter. It's worth mentioning that Julian Baker and Felix Baker's Baker Bros. Advisors dumped the largest position of the 750 funds watched by Insider Monkey, worth an estimated $1.6 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $0.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds by the end of the third quarter.

Let's also examine hedge fund activity in other stocks similar to Matinas Biopharma Holdings, Inc. (NYSE:MTNB). We will take a look at Vericity, Inc. (NASDAQ:VERY), Provident Bancorp, Inc. (NASDAQ:PVBC), PDL Community Bancorp (NASDAQ:PDLB), Sterling Bancorp, Inc. (Southfield, MI) (NASDAQ:SBT), Northeast Bank (NASDAQ:NBN), Silvercrest Asset Management Group Inc (NASDAQ:SAMG), and Timberland Bancorp, Inc. (NASDAQ:TSBK). This group of stocks' market values resemble MTNB's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VERY,2,1177,0 PVBC,7,5171,2 PDLB,3,2125,1 SBT,5,1478,-2 NBN,4,21639,-1 SAMG,3,8376,0 TSBK,4,18156,1 Average,4,8303,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $10 million in MTNB's case. Provident Bancorp, Inc. (NASDAQ:PVBC) is the most popular stock in this table. On the other hand Vericity, Inc. (NASDAQ:VERY) is the least popular one with only 2 bullish hedge fund positions. Matinas Biopharma Holdings, Inc. (NYSE:MTNB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MTNB is 59. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on MTNB as the stock returned 37.1% since the end of Q3 (through 11/27) 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.

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