Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) based on that data and determine whether they were really smart about the stock.
Hedge fund interest in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BMRN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as PTC Inc (NASDAQ:PTC), Cardinal Health, Inc. (NYSE:CAH), and Clarivate Plc (NYSE:CLVT) to gather more data points.
Israel Englander of Millennium Management
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. Now let’s take a gander at the latest hedge fund action regarding BioMarin Pharmaceutical Inc. (NASDAQ:BMRN).
Do Hedge Funds Think BMRN Is A Good Stock To Buy Now?
At the end of September, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards BMRN over the last 25 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Julian Baker and Felix Baker’s Baker Bros. Advisors has the largest position in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), worth close to $589 million, corresponding to 2.6% of its total 13F portfolio. The second largest stake is held by Palo Alto Investors, led by Joon Yun and Patrick Lee, holding a $171 million position; 10.3% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish include Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor), Stephen DuBois’s Camber Capital Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Palo Alto Investors allocated the biggest weight to BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), around 10.32% of its 13F portfolio. Copernicus Capital Management is also relatively very bullish on the stock, earmarking 10.29 percent of its 13F equity portfolio to BMRN.
Judging by the fact that BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedgies that decided to sell off their positions entirely by the end of the third quarter. At the top of the heap, Benjamin A. Smith’s Laurion Capital Management dumped the biggest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $31.7 million in stock, and Steve Zheng’s Deepcurrents Investment Group was right behind this move, as the fund dumped about $4.6 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) but similarly valued. These stocks are PTC Inc (NASDAQ:PTC), Cardinal Health, Inc. (NYSE:CAH), Clarivate Plc (NYSE:CLVT), Alliant Energy Corporation (NYSE:LNT), Zendesk Inc (NYSE:ZEN), News Corp (NASDAQ:NWSA), and Loews Corporation (NYSE:L). This group of stocks’ market valuations are similar to BMRN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PTC | 37 | 1819643 | 6 |
| CAH | 36 | 664971 | -4 |
| CLVT | 32 | 4723546 | -9 |
| LNT | 17 | 76693 | 1 |
| ZEN | 53 | 1557704 | 1 |
| NWSA | 34 | 737689 | -3 |
| L | 27 | 175121 | -1 |
| Average | 33.7 | 1393624 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.7 hedge funds with bullish positions and the average amount invested in these stocks was $1394 million. That figure was $1441 million in BMRN’s case. Zendesk Inc (NYSE:ZEN) is the most popular stock in this table. On the other hand Alliant Energy Corporation (NYSE:LNT) is the least popular one with only 17 bullish hedge fund positions. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BMRN is 66.9. 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. 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 still beat the market by 3.6 percentage points. Hedge funds were also right about betting on BMRN as the stock returned 14.7% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
