In this article we will take a look at whether hedge funds think Prothena Corporation plc (NASDAQ:PRTA) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Prothena Corporation plc (NASDAQ:PRTA) has seen an increase in hedge fund sentiment of late. Prothena Corporation plc (NASDAQ:PRTA) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PRTA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now we’re going to view the new hedge fund action surrounding Prothena Corporation plc (NASDAQ:PRTA).
Oleg Nodelman of EcoR1 Capital
Do Hedge Funds Think PRTA Is A Good Stock To Buy Now?
At third quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in PRTA over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Prothena Corporation plc (NASDAQ:PRTA) was held by EcoR1 Capital, which reported holding $803.8 million worth of stock at the end of September. It was followed by Palo Alto Investors with a $120 million position. Other investors bullish on the company included Redmile Group, Rock Springs Capital Management, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Prothena Corporation plc (NASDAQ:PRTA), around 27.96% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, setting aside 12.67 percent of its 13F equity portfolio to PRTA.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Prothena Corporation plc (NASDAQ:PRTA). Citadel Investment Group had $7.4 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $4.9 million position during the quarter. The other funds with brand new PRTA positions are Louis Navellier’s Navellier & Associates, Peter Muller’s PDT Partners, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Prothena Corporation plc (NASDAQ:PRTA) but similarly valued. We will take a look at LiveRamp Holdings, Inc. (NYSE:RAMP), Simmons First National Corporation (NASDAQ:SFNC), Laureate Education, Inc. (NASDAQ:LAUR), SM Energy Company (NYSE:SM), Kennedy-Wilson Holdings Inc (NYSE:KW), Compania Cervecerias Unidas S.A. (NYSE:CCU), and AtriCure Inc. (NASDAQ:ATRC). This group of stocks’ market valuations resemble PRTA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RAMP | 24 | 313335 | -1 |
| SFNC | 11 | 16268 | 4 |
| LAUR | 21 | 184151 | 1 |
| SM | 24 | 321678 | -1 |
| KW | 13 | 503305 | -5 |
| CCU | 7 | 21568 | -2 |
| ATRC | 21 | 243485 | 0 |
| Average | 17.3 | 229113 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $229 million. That figure was $1195 million in PRTA’s case. LiveRamp Holdings, Inc. (NYSE:RAMP) is the most popular stock in this table. On the other hand Compania Cervecerias Unidas S.A. (NYSE:CCU) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Prothena Corporation plc (NASDAQ:PRTA) is more popular among hedge funds. Our overall hedge fund sentiment score for PRTA is 90. 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. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately PRTA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PRTA were disappointed as the stock returned -36.8% since the end of the third quarter (through 12/9) 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 most of these stocks already outperformed the market since 2019.
Follow Prothena Corp Public Ltd Co (NASDAQ:PRTA)
Follow Prothena Corp Public Ltd Co (NASDAQ:PRTA)
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Disclosure: None. This article was originally published at Insider Monkey.
