Amgen, Inc. (AMGN) Fell Out Of Favor With Hedge Funds

We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Amgen, Inc. (NASDAQ:AMGN) based on that data.

Is Amgen, Inc. (NASDAQ:AMGN) undervalued? Prominent investors were in a bearish mood. The number of bullish hedge fund positions shrunk by 1 in recent months. Amgen, Inc. (NASDAQ:AMGN) was in 52 hedge funds’ portfolios at the end of September. The all time high for this statistic is 73. Our calculations also showed that AMGN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 53 hedge funds in our database with AMGN positions at the end of the second quarter.

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 take a gander at the latest hedge fund action encompassing Amgen, Inc. (NASDAQ:AMGN).

John Overdeck of Two Sigma Advisors

Do Hedge Funds Think AMGN Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 52 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from the second quarter of 2021. By comparison, 45 hedge funds held shares or bullish call options in AMGN a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Two Sigma Advisors, managed by John Overdeck and David Siegel, holds the biggest position in Amgen, Inc. (NASDAQ:AMGN). Two Sigma Advisors has a $393.9 million position in the stock, comprising 1% of its 13F portfolio. The second largest stake is held by D E Shaw, led by D. E. Shaw, holding a $267.1 million position; 0.2% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism encompass Cliff Asness’s AQR Capital Management, and Richard S. Pzena’s Pzena Investment Management. In terms of the portfolio weights assigned to each position L2 Asset Management allocated the biggest weight to Amgen, Inc. (NASDAQ:AMGN), around 2.56% of its 13F portfolio. Arjuna Capital is also relatively very bullish on the stock, dishing out 1.78 percent of its 13F equity portfolio to AMGN.

Because Amgen, Inc. (NASDAQ:AMGN) has witnessed declining sentiment from hedge fund managers, we can see that there lies a certain “tier” of fund managers that slashed their full holdings heading into Q4. Intriguingly, Arthur B Cohen and Joseph Healey’s Healthcor Management LP sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $38.6 million in stock. Michael Castor’s fund, Sio Capital, also sold off its stock, about $8.5 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Amgen, Inc. (NASDAQ:AMGN). These stocks are The Toronto-Dominion Bank (NYSE:TD), Intuitive Surgical, Inc. (NASDAQ:ISRG), Snap Inc. (NYSE:SNAP), Applied Materials, Inc. (NASDAQ:AMAT), Pinduoduo Inc. (NASDAQ:PDD), General Electric Company (NYSE:GE), and Diageo plc (NYSE:DEO). This group of stocks’ market caps are similar to AMGN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 49.1 hedge funds with bullish positions and the average amount invested in these stocks was $3625 million. That figure was $1448 million in AMGN’s case. Snap Inc. (NYSE:SNAP) is the most popular stock in this table. On the other hand The Toronto-Dominion Bank (NYSE:TD) is the least popular one with only 17 bullish hedge fund positions. Amgen, Inc. (NASDAQ:AMGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMGN is 54.1. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately AMGN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AMGN were disappointed as the stock returned -5.7% since the end of September (through 11/30) 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.

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