Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups 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 and analyze what the smart money thinks of Emergent Biosolutions Inc (NYSE:EBS) based on that data.
Is Emergent Biosolutions Inc (NYSE:EBS) ready to rally soon? Money managers are taking a bullish view. The number of long hedge fund bets rose by 4 recently. Our calculations also showed that EBS isn’t among the 30 most popular stocks among hedge funds. EBS was in 16 hedge funds’ portfolios at the end of the third quarter of 2018. There were 12 hedge funds in our database with EBS positions at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s view the fresh hedge fund action encompassing Emergent Biosolutions Inc (NYSE:EBS).
How are hedge funds trading Emergent Biosolutions Inc (NYSE:EBS)?
Heading into the fourth quarter of 2018, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in EBS at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Emergent Biosolutions Inc (NYSE:EBS), with a stake worth $123.2 million reported as of the end of September. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $38.2 million. Fisher Asset Management, AQR Capital Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key money managers were leading the bulls’ herd. Sio Capital, managed by Michael Castor, assembled the largest position in Emergent Biosolutions Inc (NYSE:EBS). Sio Capital had $2.8 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management, Roger Ibbotson’s Zebra Capital Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Emergent Biosolutions Inc (NYSE:EBS) but similarly valued. These stocks are Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), Ellie Mae Inc (NYSE:ELLI), Guangshen Railway Co. Ltd (NYSE:GSH), and ACI Worldwide Inc (NASDAQ:ACIW). This group of stocks’ market caps are closest to EBS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDGL | 26 | 575763 | 5 |
| ELLI | 15 | 613258 | 2 |
| GSH | 1 | 4749 | 0 |
| ACIW | 15 | 298192 | -2 |
| Average | 14.25 | 372991 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $373 million. That figure was $219 million in EBS’s case. Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) is the most popular stock in this table. On the other hand Guangshen Railway Co. Ltd (NYSE:GSH) is the least popular one with only 1 bullish hedge fund positions. Emergent Biosolutions Inc (NYSE:EBS) 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 MDGL might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
