Did Hedge Funds Get Gilead Sciences, Inc. (GILD) Right?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 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 September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Gilead Sciences, Inc. (NASDAQ:GILD) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

Is Gilead Sciences, Inc. (NASDAQ:GILD) a buy here? Prominent investors were getting more optimistic. The number of bullish hedge fund positions improved by 1 lately. Gilead Sciences, Inc. (NASDAQ:GILD) was in 55 hedge funds’ portfolios at the end of September. The all time high for this statistic is 93. Our calculations also showed that GILD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Matthew Hulsizer of PEAK6 Capital

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 glance at the latest hedge fund action surrounding Gilead Sciences, Inc. (NASDAQ:GILD).

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

Heading into the fourth quarter of 2021, a total of 55 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GILD over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of Gilead Sciences, Inc. (NASDAQ:GILD), with a stake worth $384.2 million reported as of the end of September. Trailing Renaissance Technologies was Two Sigma Advisors, which amassed a stake valued at $330.2 million. Sarissa Capital Management, Citadel Investment Group, and Ariel Investments 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 Sarissa Capital Management allocated the biggest weight to Gilead Sciences, Inc. (NASDAQ:GILD), around 16.27% of its 13F portfolio. Healthcare Value Capital is also relatively very bullish on the stock, earmarking 8.27 percent of its 13F equity portfolio to GILD.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Partner Fund Management, managed by Christopher James, created the most outsized call position in Gilead Sciences, Inc. (NASDAQ:GILD). Partner Fund Management had $67.3 million invested in the company at the end of the quarter. Mike Masters’s Masters Capital Management also initiated a $34.9 million position during the quarter. The following funds were also among the new GILD investors: Matthew Hulsizer’s PEAK6 Capital Management, Efrem Kamen’s Pura Vida Investments, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s now review hedge fund activity in other stocks similar to Gilead Sciences, Inc. (NASDAQ:GILD). We will take a look at PetroChina Company Limited (NYSE:PTR), Automatic Data Processing (NASDAQ:ADP), Uber Technologies, Inc. (NYSE:UBER), Altria Group Inc (NYSE:MO), Brookfield Asset Management Inc. (NYSE:BAM), Mercadolibre Inc (NASDAQ:MELI), and The Blackstone Group Inc. (NYSE:BX). This group of stocks’ market caps are closest to GILD’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 56 hedge funds with bullish positions and the average amount invested in these stocks was $3532 million. That figure was $1752 million in GILD’s case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand PetroChina Company Limited (NYSE:PTR) is the least popular one with only 7 bullish hedge fund positions. Gilead Sciences, Inc. (NASDAQ:GILD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GILD is 41.4. 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 negative signal and 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 surpassed the market again by 3.6 percentage points. Unfortunately, GILD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GILD investors were disappointed as the stock returned -0.7% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.

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

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