Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Is Halozyme Therapeutics, Inc. (NASDAQ:HALO) an exceptional investment today? Prominent investors are betting on the stock. The number of bullish hedge fund bets improved by 2 recently. Our calculations also showed that HALO isn’t among the 30 most popular stocks among hedge funds. HALO was in 21 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with HALO holdings at the end of the previous quarter.
In the financial world there are a large number of methods stock traders employ to appraise their stock investments. A duo of the best methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the S&P 500 by a significant amount (see the details here).
We’re going to go over the key hedge fund action encompassing Halozyme Therapeutics, Inc. (NASDAQ:HALO).
Hedge fund activity in Halozyme Therapeutics, Inc. (NASDAQ:HALO)
Heading into the fourth quarter of 2018, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in HALO heading into this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Iridian Asset Management was the largest shareholder of Halozyme Therapeutics, Inc. (NASDAQ:HALO), with a stake worth $167.7 million reported as of the end of September. Trailing Iridian Asset Management was MSDC Management, which amassed a stake valued at $40.8 million. GLG Partners, Two Sigma Advisors, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Element Capital Management, managed by Jeffrey Talpins, created the most outsized position in Halozyme Therapeutics, Inc. (NASDAQ:HALO). Element Capital Management had $0.2 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $0.2 million position during the quarter. The only other fund with a brand new HALO position is Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks similar to Halozyme Therapeutics, Inc. (NASDAQ:HALO). We will take a look at Valero Energy Partners LP (NYSE:VLP), Bilibili Inc. (NASDAQ:BILI), MyoKardia, Inc. (NASDAQ:MYOK), and The Descartes Systems Group Inc (NASDAQ:DSGX). All of these stocks’ market caps are similar to HALO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VLP | 3 | 8387 | 1 |
| BILI | 16 | 224612 | 5 |
| MYOK | 22 | 670244 | 2 |
| DSGX | 9 | 84748 | 2 |
| Average | 12.5 | 246998 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $247 million. That figure was $295 million in HALO’s case. MyoKardia, Inc. (NASDAQ:MYOK) is the most popular stock in this table. On the other hand Valero Energy Partners LP (NYSE:VLP) is the least popular one with only 3 bullish hedge fund positions. Halozyme Therapeutics, Inc. (NASDAQ:HALO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MYOK might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
