Do Hedge Funds Love Horizon Therapeutics Public Limited Company (HZNP)?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Horizon Therapeutics Public Limited Company (NASDAQ:HZNP).

Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was in 56 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 61. HZNP investors should be aware of an increase in enthusiasm from smart money of late. There were 48 hedge funds in our database with HZNP positions at the end of the first quarter. Our calculations also showed that HZNP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

John Paulson of Paulson & Co

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to check out the latest hedge fund action encompassing Horizon Therapeutics Public Limited Company (NASDAQ:HZNP).

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

At the end of June, a total of 56 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. By comparison, 45 hedge funds held shares or bullish call options in HZNP a year ago. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

More specifically, Avoro Capital Advisors (venBio Select Advisor) was the largest shareholder of Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), with a stake worth $842.8 million reported as of the end of June. Trailing Avoro Capital Advisors (venBio Select Advisor) was Paulson & Co, which amassed a stake valued at $748.3 million. Renaissance Technologies, OrbiMed Advisors, and Adage Capital Management 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 Paulson & Co allocated the biggest weight to Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), around 17.88% of its 13F portfolio. Avoro Capital Advisors (venBio Select Advisor) is also relatively very bullish on the stock, setting aside 14.66 percent of its 13F equity portfolio to HZNP.

Now, specific money managers have jumped into Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the most outsized position in Horizon Therapeutics Public Limited Company (NASDAQ:HZNP). Point72 Asset Management had $98.9 million invested in the company at the end of the quarter. Farallon Capital also initiated a $46.8 million position during the quarter. The other funds with new positions in the stock are Zach Schreiber’s Point State Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Kamran Moghtaderi’s Eversept Partners.

Let’s now review hedge fund activity in other stocks similar to Horizon Therapeutics Public Limited Company (NASDAQ:HZNP). We will take a look at CarMax Inc (NYSE:KMX), TransUnion (NYSE:TRU), DraftKings Inc. (NASDAQ:DKNG), MGM Resorts International (NYSE:MGM), Church & Dwight Co., Inc. (NYSE:CHD), Gartner Inc (NYSE:IT), and Fortis Inc. (NYSE:FTS). All of these stocks’ market caps are closest to HZNP’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.6 hedge funds with bullish positions and the average amount invested in these stocks was $1658 million. That figure was $4325 million in HZNP’s case. MGM Resorts International (NYSE:MGM) is the most popular stock in this table. On the other hand Fortis Inc. (NYSE:FTS) is the least popular one with only 9 bullish hedge fund positions. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HZNP is 84.5. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on HZNP as the stock returned 17.4% since the end of Q2 (through 9/27) 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.