The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of BridgeBio Pharma, Inc. (NASDAQ:BBIO).
BridgeBio Pharma, Inc. (NASDAQ:BBIO) was in 26 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BBIO has seen an increase in enthusiasm from smart money of late. There were 23 hedge funds in our database with BBIO positions at the end of the fourth quarter. Our calculations also showed that BBIO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Ole Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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 let’s take a gander at the key hedge fund action encompassing BridgeBio Pharma, Inc. (NASDAQ:BBIO).
Do Hedge Funds Think BBIO Is A Good Stock To Buy Now?
At first quarter’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in BBIO over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Viking Global was the largest shareholder of BridgeBio Pharma, Inc. (NASDAQ:BBIO), with a stake worth $1639.9 million reported as of the end of March. Trailing Viking Global was Perceptive Advisors, which amassed a stake valued at $477.8 million. Hillhouse Capital Management, Cormorant Asset Management, and Darwin Global 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 Darwin Global Management allocated the biggest weight to BridgeBio Pharma, Inc. (NASDAQ:BBIO), around 25.21% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, dishing out 6.04 percent of its 13F equity portfolio to BBIO.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Opaleye Management, managed by James A. Silverman, initiated the most outsized position in BridgeBio Pharma, Inc. (NASDAQ:BBIO). Opaleye Management had $36 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $7.3 million position during the quarter. The other funds with brand new BBIO positions are D. E. Shaw’s D E Shaw, Jonathan Dawson’s Southport Management, and Michael Gelband’s ExodusPoint Capital.
Let’s go over hedge fund activity in other stocks similar to BridgeBio Pharma, Inc. (NASDAQ:BBIO). We will take a look at Pinnacle West Capital Corporation (NYSE:PNW), AngloGold Ashanti Limited (NYSE:AU), AbCellera Biologics Inc. (NASDAQ:ABCL), Jones Lang LaSalle Inc (NYSE:JLL), Flex Ltd. (NASDAQ:FLEX), Sensata Technologies Holding plc (NYSE:ST), and Neurocrine Biosciences, Inc. (NASDAQ:NBIX). This group of stocks’ market values are similar to BBIO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PNW | 15 | 145574 | -9 |
| AU | 14 | 319512 | -3 |
| ABCL | 20 | 1842948 | -5 |
| JLL | 20 | 1241101 | -3 |
| FLEX | 48 | 1635901 | 4 |
| ST | 36 | 1744897 | 1 |
| NBIX | 19 | 882657 | -12 |
| Average | 24.6 | 1116084 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.6 hedge funds with bullish positions and the average amount invested in these stocks was $1116 million. That figure was $2899 million in BBIO’s case. Flex Ltd. (NASDAQ:FLEX) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (NYSE:AU) is the least popular one with only 14 bullish hedge fund positions. BridgeBio Pharma, Inc. (NASDAQ:BBIO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BBIO is 55.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately BBIO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BBIO were disappointed as the stock returned 4.2% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Bridgebio Pharma Inc. (NASDAQ:BBIO)
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Disclosure: None. This article was originally published at Insider Monkey.
