Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Taro Pharmaceutical Industries Ltd. (NYSE:TARO) in this article.
Taro Pharmaceutical Industries Ltd. (NYSE:TARO) was in 23 hedge funds’ portfolios at the end of September. TARO investors should be aware of an increase in support from the world’s most elite money managers lately. There were 20 hedge funds in our database with TARO positions at the end of the previous quarter. At the end of this article we will also compare TARO to other stocks, including Alexandria Real Estate Equities Inc (NYSE:ARE), WABCO Holdings Inc. (NYSE:WBC), and EQT GP Holdings LP (NYSE:EQGP) to get a better sense of its popularity.
Follow Taro Pharmaceutical Industries Ltd (NYSE:TARO)
Follow Taro Pharmaceutical Industries Ltd (NYSE:TARO)
In today’s marketplace there are several tools stock traders have at their disposal to evaluate their holdings. Some of the most innovative tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can beat the market by a very impressive margin (see the details here).
With all of this in mind, we’re going to analyze the new action surrounding Taro Pharmaceutical Industries Ltd. (NYSE:TARO).
How are hedge funds trading Taro Pharmaceutical Industries Ltd. (NYSE:TARO)?
At the Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Brian Sheehy’s Iszo Capital has the most valuable position in Taro Pharmaceutical Industries Ltd. (NYSE:TARO), worth close to $108.6 million, corresponding to 61.6% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, with a $60.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include Jonathan Savitz’s Greywolf Capital Management, Shashin Shah’s Think Investments and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
As one would reasonably expect, key hedge funds were breaking ground themselves. Kerrisdale Capital, managed by Sahm Adrangi, initiated the biggest position in Taro Pharmaceutical Industries Ltd. (NYSE:TARO). Kerrisdale Capital had $11 million invested in the company at the end of the quarter. Jacob Gottlieb’s Visium Asset Management also made a $1.6 million investment in the stock during the quarter. The other funds with brand new TARO positions are Michael Platt and William Reeves’s BlueCrest Capital Mgmt., John Overdeck and David Siegel’s Two Sigma Advisors, and Noam Gottesman’s GLG Partners.
Let’s now review hedge fund activity in other stocks similar to Taro Pharmaceutical Industries Ltd. (NYSE:TARO). These stocks are Alexandria Real Estate Equities Inc (NYSE:ARE), WABCO Holdings Inc. (NYSE:WBC), EQT GP Holdings LP (NYSE:EQGP), and American Financial Group (NYSE:AFG). All of these stocks’ market caps match TARO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARE | 22 | 110130 | 8 |
| WBC | 33 | 1264724 | 0 |
| EQGP | 5 | 18951 | 1 |
| AFG | 19 | 139146 | -2 |
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $383 million. That figure was $312 million in TARO’s case. WABCO Holdings Inc. (NYSE:WBC) is the most popular stock in this table. On the other hand EQT GP Holdings LP (NYSE:EQGP) is the least popular one with only 5 bullish hedge fund positions. Taro Pharmaceutical Industries Ltd. (NYSE:TARO) 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 WBC might be a better candidate to consider a long position.
