Hedge Funds Are Nibbling On BioMarin Pharmaceutical Inc. (BMRN)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on BioMarin Pharmaceutical Inc. (NASDAQ:BMRN).

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) investors should be aware of an increase in enthusiasm from smart money of late. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) was in 44 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 54. There were 43 hedge funds in our database with BMRN positions at the end of the first quarter. Our calculations also showed that BMRN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

William Leland Edwards of Palo Alto Investors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 we’re going to check out the latest hedge fund action regarding BioMarin Pharmaceutical Inc. (NASDAQ:BMRN).

Do Hedge Funds Think BMRN Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 44 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BMRN over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the most valuable position in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN). Baker Bros. Advisors has a $633.3 million position in the stock, comprising 2.8% of its 13F portfolio. The second largest stake is held by Palo Alto Investors, holding a $184.6 million position; the fund has 10.2% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions consist of Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor), Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Palo Alto Investors allocated the biggest weight to BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), around 10.18% of its 13F portfolio. Baker Bros. Advisors is also relatively very bullish on the stock, dishing out 2.78 percent of its 13F equity portfolio to BMRN.

As industrywide interest jumped, key hedge funds have jumped into BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the largest position in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN). Two Sigma Advisors had $17.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $3.4 million position during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Peter Muller’s PDT Partners, and Lee Ainslie’s Maverick Capital.

Let’s go over hedge fund activity in other stocks similar to BioMarin Pharmaceutical Inc. (NASDAQ:BMRN). We will take a look at Liberty Global plc (NASDAQ:LBTYA), News Corp (NASDAQ:NWSA), James Hardie Industries plc (NYSE:JHX), GameStop Corp. (NYSE:GME), Lumen Technologies, Inc. (NYSE:LUMN), Brown & Brown, Inc. (NYSE:BRO), and Masco Corporation (NYSE:MAS). This group of stocks’ market caps are closest to BMRN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.1 hedge funds with bullish positions and the average amount invested in these stocks was $701 million. That figure was $1325 million in BMRN’s case. News Corp (NASDAQ:NWSA) is the most popular stock in this table. On the other hand James Hardie Industries plc (NYSE:JHX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is more popular among hedge funds. Our overall hedge fund sentiment score for BMRN is 80.4. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Unfortunately BMRN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BMRN were disappointed as the stock returned -7.5% since the end of the second quarter (through 10/1) 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.

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Disclosure: None. This article was originally published at Insider Monkey.

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