Varied Sectors Attract Armistice Capital, Other Investors in the First Half of 2024

Hedge funds and institutional investors expressed an interest in companies within a number of industries during the first and second quarter of the year.

In the healthcare sector, for instance, investors have backed a number of established and emerging companies that develop and manufacture medical products — such as Grifols, S.A., a $4.94 billion biopharma and healthcare solutions organization with locations in Spain, the United States, and Canada.

MarketBeat reported in September that a number of institutional investors had increased their holdings of the company — whose offerings include an immunoglobulin used to treat immunodeficiencies; albumin, which can help restore circulatory volume and protein loss relating to liver cirrhosis cardiocirculatory failure, and severe burns; a plasma protein used to treat a genetic disease; and a spleen tyrosine kinase inhibitor.

In the first quarter of this year, Cohen Investment Advisors LLC purchased shares of the company’s stock valued at roughly $80,000, and Cetera Advisors LLC acquired shares worth approximately $147,000, MarketBeat said, with both investors obtaining a new position in the company.

In the second quarter, B. Riley Wealth Advisors Inc. purchased a new 56,950 shares of Grifols’ stock that were valued at roughly $359,000, according to MarketBeat.

Global value-oriented and event-driven hedge fund Armistice Capital — after adding 1,244,000 shares of the biotech company’s stock last quarter — increased its holdings by 18.7%; the hedge fund now owns 7,892,000 shares of Grifols, valued at $49,759,000

Clothing and Other Companies Could Benefit from Heightened Discretionary Spending

As Deloitte pointed out in its Sept. 20 economic forecast, with U.S. households having essentially drained what they’d saved during the COVID-19 pandemic, for future spending growth to occur, consumers may need to be able to increase their income and debt level — but additional Federal Reserve rate cuts would likely help.

We may see some in the coming months. Inflation has moved closer to the Federal Reserve’s 2% target, according to recent data, which could encourage the Fed to lower the federal funds rate, which influences interest rates, further. In September, the Fed’s Federal Open Market Committee announced plans to reduce the target range for the federal funds rate for the first time in more than a year, lowering it by 1/2 percentage point to 4.75% to 5%.

Economists who Reuters polled last month said, in addition to the Fed’s September rate cut, they anticipate the FOMC will also enact two other reductions this year at its scheduled November and December meetings.

Even before the Fed made its rate reduction in September, some investors had already increased their stake in companies that operate in the consumer discretionary spending sector.

Armistice Capital, for instance, obtained a new position in the second quarter of 2024 in denim maker Levi Strauss & Co., buying 347,000 shares of its stock — which MarketBeat reported in late September was valued at approximately $6,690,000, giving Armistice an approximately 0.09% share of the company.

Other hedge funds, according to MarketBeat, also invested recently in Levi Strauss & Co., including the California State Teachers Retirement System, whose holdings increased by 1% in the first quarter of 2024, and Waycross Investment Management Co., which expanded its amount of stock by 2.6% in the most recent quarter.

BTC Capital Management Inc. added 1,715 shares of the company during the second quarter of the year; and 272 Capital LP reportedly obtained a new position in Levi Strauss & Co. by purchasing shares during the same quarter that were valued at approximately $35,000.

The jeans manufacturer’s second quarter earnings results, released on June 26, showed $0.16 earnings per share for the quarter — which MarketBeat said was above analysts’ $0.11-$0.05 estimate, noting that in a June 27 report, Telsey Advisory Group had given it an outperform rating, issuing a $26.00-per-share Levi Strauss & Co. price target on June 27.

Investors Eye Mining Efforts

In the mining sector, the value of private equity deals increased in the second quarter by 527%, compared to the previous quarter, and deal value rose 463% year-over-year, according to Mining Technology. A number of institutional investors and hedge fund have also increased their holdings of companies in the sector — including Hudbay Minerals, a copper-focused mining entity with excavation efforts in Canada, Peru and the United States.

Six ratings firms have given the company a buy rating, according to a recent MarketBeat article — including Stifel Canada, which issued a strong-buy rating for the company’s stock in a July 22 report, and Jefferies Financial Group, which changed its rating level from hold to buy in mid-August.

Some had previously held shares and increased their total during the first half of the year. Banque Cantonale Vaudoise, for example, grew its holdings by 38.7% in the first quarter, according to MarketBeat, and added 1,806 shares in the second, bringing its total amount of shares to 6,471.

Per 13F filing information for Register Financial Advisors LLC, in the first quarter of the year — much like Armistice Capital and Ritholtz Wealth Management in the second — the advisory firm acquired a new position in shares of Hudbay Minerals.

Register Financial Advisors’ shares were estimated to be valued at roughly $35,000; MarketBeat also reported Ritholtz Wealth Management’s purchase equated to $96,000 — and Armistice Capital’s shares of Hudbay Minerals were said to be worth approximately $97,000.

As of October 2024, institutional investors owned more than half — 66.98% — of Hudbay Minerals’ stock, according to Nasdaq.