Do Hedge Funds Love TESARO Inc (TSRO)?

Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last 12 months ending in October 30. Sixty three percent of these 30 stocks outperformed the market. Although the elite funds occasionally have their duds, such as Micron and Anadarko Petroleum, which fell 50% and 26%, respectively during the same time period, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of TESARO Inc (NASDAQ:TSRO).

TESARO Inc (NASDAQ:TSRO) was in 17 hedge funds’ portfolios at the end of September. TSRO investors should pay attention to a decrease in support from the world’s most elite money managers recently. There were 19 hedge funds in our database with TSRO holdings at the end of the previous quarter. At the end of this article we will also compare TSRO to other stocks including Globalstar, Inc. (PINK:GSAT), Yamana Gold Inc. (USA) (NYSE:AUY), and Matthews International Corp (NASDAQ:MATW) to get a better sense of its popularity.

Now, we’re going to take a glance at the latest action surrounding TESARO Inc (NASDAQ:TSRO).

Hedge fund activity in TESARO Inc (NASDAQ:TSRO)

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the second quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the largest position in TESARO Inc (NASDAQ:TSRO). OrbiMed Advisors has a $69.6 million position in the stock, comprising 0.7% of its 13F portfolio. Sitting at the No. 2 spot is Point72 Asset Management, managed by Steve Cohen, which holds a $44.6 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish contain Joseph Edelman’s Perceptive Advisors, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Ken Griffin’s Citadel Investment Group.

Since TESARO Inc (NASDAQ:TSRO) has faced a declination in interest from the entirety of the hedge funds we track, we can see that there was a specific group of fund managers who sold off their full holdings in the third quarter. Intriguingly, Christian Leone’s Luxor Capital Group sold off the largest stake of the “upper crust” of funds watched by Insider Monkey, worth an estimated $18.3 million in stock. Arthur B Cohen and Joseph Healey’s fund, Healthcor Management LP, also dumped its stock, about $16.3 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to TESARO Inc (NASDAQ:TSRO). We will take a look at Globalstar, Inc. (PINK:GSAT), Yamana Gold Inc. (USA) (NYSE:AUY), Matthews International Corp (NASDAQ:MATW), and Sohu.com Inc (NASDAQ:SOHU). All of these stocks’ market caps are closest to TSRO’s market cap.

As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $229 million in TSRO’s case. Sohu.com Inc (NASDAQ:SOHU) is the most popular stock in this table. On the other hand Matthews International Corp (NASDAQ:MATW) is the least popular one with only 13 bullish hedge fund positions. TESARO Inc (NASDAQ:TSRO) is the most popular stock in this group and that makes it worth a closer look.