As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Amarin Corporation plc (NASDAQ:AMRN).
Amarin Corporation plc (NASDAQ:AMRN) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that AMRN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare AMRN to other stocks including MFA Financial, Inc. (NYSE:MFA), Trustmark Corp (NASDAQ:TRMK), and CSW Industrials, Inc. (NASDAQ:CSWI) to get a better sense of its popularity.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Keeping this in mind we’re going to view the new hedge fund action regarding Amarin Corporation plc (NASDAQ:AMRN).
Alex Denner of Sarissa Capital Management
Do Hedge Funds Think AMRN Is A Good Stock To Buy Now?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AMRN over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Amarin Corporation plc (NASDAQ:AMRN) was held by Baker Bros. Advisors, which reported holding $111.5 million worth of stock at the end of September. It was followed by Eversept Partners with a $59.2 million position. Other investors bullish on the company included Biotechnology Value Fund / BVF Inc, Sarissa Capital Management, and Avoro Capital Advisors (venBio Select Advisor). In terms of the portfolio weights assigned to each position Eversept Partners allocated the biggest weight to Amarin Corporation plc (NASDAQ:AMRN), around 4.43% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, setting aside 4.16 percent of its 13F equity portfolio to AMRN.
Because Amarin Corporation plc (NASDAQ:AMRN) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of fund managers that elected to cut their positions entirely in the third quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management dumped the biggest position of all the hedgies monitored by Insider Monkey, worth close to $8.2 million in stock. Renaissance Technologies, also sold off its stock, about $6.2 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to Amarin Corporation plc (NASDAQ:AMRN). We will take a look at MFA Financial, Inc. (NYSE:MFA), Trustmark Corp (NASDAQ:TRMK), CSW Industrials, Inc. (NASDAQ:CSWI), BGC Partners, Inc. (NASDAQ:BGCP), ESCO Technologies Inc. (NYSE:ESE), Revance Therapeutics Inc (NASDAQ:RVNC), and NetScout Systems, Inc. (NASDAQ:NTCT). This group of stocks’ market values match AMRN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MFA | 17 | 167550 | -3 |
| TRMK | 7 | 11276 | -3 |
| CSWI | 14 | 37768 | 1 |
| BGCP | 23 | 371468 | -8 |
| ESE | 16 | 102837 | 3 |
| RVNC | 16 | 200058 | 4 |
| NTCT | 10 | 122970 | -1 |
| Average | 14.7 | 144847 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $145 million. That figure was $375 million in AMRN’s case. BGC Partners, Inc. (NASDAQ:BGCP) is the most popular stock in this table. On the other hand Trustmark Corp (NASDAQ:TRMK) is the least popular one with only 7 bullish hedge fund positions. Amarin Corporation plc (NASDAQ:AMRN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMRN is 64.9. 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 positive signal but 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately AMRN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AMRN were disappointed as the stock returned -33.9% since the end of September (through 12/31) 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 many of these stocks already outperformed the market since 2019.
Follow Amarin Corp Plc (NASDAQ:AMRN)
Follow Amarin Corp Plc (NASDAQ:AMRN)
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Disclosure: None. This article was originally published at Insider Monkey.
