The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought argenx SE (NASDAQ:ARGX) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
argenx SE (NASDAQ:ARGX) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. argenx SE (NASDAQ:ARGX) was in 29 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 34. Our calculations also showed that ARGX isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 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.
Felix Baker of Baker Bros.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world 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. With all of this in mind let’s review the latest hedge fund action encompassing argenx SE (NASDAQ:ARGX).
What have hedge funds been doing with argenx SE (NASDAQ:ARGX)?
At the end of the second quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ARGX over the last 20 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Redmile Group was the largest shareholder of argenx SE (NASDAQ:ARGX), with a stake worth $233.1 million reported as of the end of September. Trailing Redmile Group was Baker Bros. Advisors, which amassed a stake valued at $229.6 million. Avoro Capital Advisors (venBio Select Advisor), Hillhouse Capital Management, and Biotechnology Value Fund / BVF Inc 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 Biotechnology Value Fund / BVF Inc allocated the biggest weight to argenx SE (NASDAQ:ARGX), around 5.42% of its 13F portfolio. Avoro Capital Advisors (venBio Select Advisor) is also relatively very bullish on the stock, setting aside 4.32 percent of its 13F equity portfolio to ARGX.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Armistice Capital, managed by Steven Boyd, created the largest position in argenx SE (NASDAQ:ARGX). Armistice Capital had $15.3 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $9.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Marc Schneidman’s Aquilo Capital Management, Michael Gelband’s ExodusPoint Capital, and Matthew L Pinz’s Pinz Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as argenx SE (NASDAQ:ARGX) but similarly valued. We will take a look at Molina Healthcare, Inc. (NYSE:MOH), Royal Caribbean Group (NYSE:RCL), Avalara, Inc. (NYSE:AVLR), CBOE Global Markets Inc (NASDAQ:CBOE), Huazhu Group Limited (NASDAQ:HTHT), Icahn Enterprises LP (NASDAQ:IEP), and Franklin Resources, Inc. (NYSE:BEN). This group of stocks’ market values match ARGX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MOH | 34 | 1316051 | 2 |
| RCL | 31 | 381178 | 6 |
| AVLR | 37 | 1446149 | 3 |
| CBOE | 32 | 840386 | -6 |
| HTHT | 17 | 381209 | 0 |
| IEP | 3 | 9994902 | 0 |
| BEN | 36 | 410167 | 4 |
| Average | 27.1 | 2110006 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $2110 million. That figure was $1158 million in ARGX’s case. Avalara, Inc. (NYSE:AVLR) is the most popular stock in this table. On the other hand Icahn Enterprises LP (NASDAQ:IEP) is the least popular one with only 3 bullish hedge fund positions. argenx SE (NASDAQ:ARGX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ARGX is 72.8. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and beat the market by 17.6 percentage points. Unfortunately ARGX wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ARGX were disappointed as the stock returned 3.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
