The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded BridgeBio Pharma, Inc. (NASDAQ:BBIO) based on those filings.
BridgeBio Pharma, Inc. (NASDAQ:BBIO) investors should be aware of a decrease in enthusiasm from smart money recently. Our calculations also showed that BBIO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to 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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.
Andreas Halvorsen of Viking Global
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s view the new hedge fund action encompassing BridgeBio Pharma, Inc. (NASDAQ:BBIO).
How are hedge funds trading BridgeBio Pharma, Inc. (NASDAQ:BBIO)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BBIO over the last 17 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in BridgeBio Pharma, Inc. (NASDAQ:BBIO) was held by Viking Global, which reported holding $571.6 million worth of stock at the end of September. It was followed by Perceptive Advisors with a $144 million position. Other investors bullish on the company included Hillhouse Capital Management, Cormorant Asset Management, and SCGE Management. In terms of the portfolio weights assigned to each position Perceptive Advisors allocated the biggest weight to BridgeBio Pharma, Inc. (NASDAQ:BBIO), around 3.88% of its 13F portfolio. Cormorant Asset Management is also relatively very bullish on the stock, dishing out 3.42 percent of its 13F equity portfolio to BBIO.
Seeing as BridgeBio Pharma, Inc. (NASDAQ:BBIO) has experienced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of money managers that elected to cut their full holdings heading into Q4. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group dumped the largest stake of all the hedgies followed by Insider Monkey, totaling an estimated $1.8 million in stock. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $0.6 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BridgeBio Pharma, Inc. (NASDAQ:BBIO) but similarly valued. We will take a look at PolyOne Corporation (NYSE:POL), Kosmos Energy Ltd (NYSE:KOS), Golub Capital BDC Inc (NASDAQ:GBDC), and Triton International Limited (NYSE:TRTN). All of these stocks’ market caps are similar to BBIO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| POL | 19 | 176335 | -5 |
| KOS | 24 | 154461 | 0 |
| GBDC | 11 | 47351 | 3 |
| TRTN | 14 | 50512 | 0 |
| Average | 17 | 107165 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $885 million in BBIO’s case. Kosmos Energy Ltd (NYSE:KOS) is the most popular stock in this table. On the other hand Golub Capital BDC Inc (NASDAQ:GBDC) is the least popular one with only 11 bullish hedge fund positions. BridgeBio Pharma, Inc. (NASDAQ:BBIO) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on BBIO as the stock returned 35.1% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
