Hedge Funds Are Piling Into Horizon Therapeutics (HZNP)

In this article we will analyze whether Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) the right pick for your portfolio? Prominent investors were taking an optimistic view. The number of long hedge fund bets inched up by 4 in recent months. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was in 60 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 61. Our calculations also showed that HZNP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 56 hedge funds in our database with HZNP holdings at the end of June.

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 let’s take a peek at the key hedge fund action encompassing Horizon Therapeutics Public Limited Company (NASDAQ:HZNP).

John Paulson of Paulson & Co

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

At the end of September, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the second quarter of 2021. By comparison, 61 hedge funds held shares or bullish call options in HZNP a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

More specifically, Avoro Capital Advisors (venBio Select Advisor) was the largest shareholder of Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), with a stake worth $985.9 million reported as of the end of September. Trailing Avoro Capital Advisors (venBio Select Advisor) was Paulson & Co, which amassed a stake valued at $675.8 million. Renaissance Technologies, OrbiMed Advisors, and Perceptive Advisors 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 Paulson & Co allocated the biggest weight to Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), around 19.25% of its 13F portfolio. Avoro Capital Advisors (venBio Select Advisor) is also relatively very bullish on the stock, setting aside 15.49 percent of its 13F equity portfolio to HZNP.

Now, key money managers have jumped into Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) headfirst. Alyeska Investment Group, managed by Anand Parekh, assembled the most outsized position in Horizon Therapeutics Public Limited Company (NASDAQ:HZNP). Alyeska Investment Group had $52 million invested in the company at the end of the quarter. Christopher James’s Partner Fund Management also made a $48.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Richard Driehaus’s Driehaus Capital, and Bhagwan Jay Rao’s Integral Health Asset Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) but similarly valued. We will take a look at Expedia Group Inc (NASDAQ:EXPE), Sirius XM Holdings Inc (NASDAQ:SIRI), Kansas City Southern (NYSE:KSU), Upstart Holdings, Inc. (NASDAQ:UPST), Yum China Holdings, Inc. (NYSE:YUMC), The Hartford Financial Services Group Inc (NYSE:HIG), and Hess Corporation (NYSE:HES). This group of stocks’ market valuations resemble HZNP’s market valuation.

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As you can see these stocks had an average of 39.7 hedge funds with bullish positions and the average amount invested in these stocks was $2692 million. That figure was $4574 million in HZNP’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Upstart Holdings, Inc. (NASDAQ:UPST) is the least popular one with only 23 bullish hedge fund positions. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HZNP is 72.1. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately HZNP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HZNP were disappointed as the stock returned -5.3% since the end of September (through 11/30) 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.

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