We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. 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. Insider Monkey finished processing 835 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2019. What do these smart investors think about Repligen Corporation (NASDAQ:RGEN)?
Is Repligen Corporation (NASDAQ:RGEN) an exceptional investment now? Hedge funds are in a pessimistic mood. The number of bullish hedge fund positions were trimmed by 3 recently. Our calculations also showed that RGEN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the recent hedge fund action encompassing Repligen Corporation (NASDAQ:RGEN).
How are hedge funds trading Repligen Corporation (NASDAQ:RGEN)?
At the end of the fourth quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in RGEN a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Repligen Corporation (NASDAQ:RGEN) was held by 12 West Capital Management, which reported holding $109 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $22.6 million position. Other investors bullish on the company included Iron Triangle Partners, Miura Global Management, and AQR Capital Management. In terms of the portfolio weights assigned to each position 12 West Capital Management allocated the biggest weight to Repligen Corporation (NASDAQ:RGEN), around 6.88% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, earmarking 3.68 percent of its 13F equity portfolio to RGEN.
Since Repligen Corporation (NASDAQ:RGEN) has experienced falling interest from the smart money, it’s safe to say that there were a few hedgies who sold off their positions entirely last quarter. Intriguingly, Benjamin A. Smith’s Laurion Capital Management dropped the largest position of all the hedgies watched by Insider Monkey, valued at an estimated $1.8 million in stock, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors was right behind this move, as the fund said goodbye to about $1.6 million worth. These transactions are important to note, as total hedge fund interest was cut by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Repligen Corporation (NASDAQ:RGEN) but similarly valued. We will take a look at Global Blood Therapeutics Inc (NASDAQ:GBT), Clean Harbors Inc (NYSE:CLH), First Financial Bankshares Inc (NASDAQ:FFIN), and Companhia Siderurgica Nacional (NYSE:SID). All of these stocks’ market caps match RGEN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GBT | 23 | 793382 | -3 |
| CLH | 24 | 474390 | -4 |
| FFIN | 13 | 9578 | -3 |
| SID | 6 | 18104 | -1 |
| Average | 16.5 | 323864 | -2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $324 million. That figure was $248 million in RGEN’s case. Clean Harbors Inc (NYSE:CLH) is the most popular stock in this table. On the other hand Companhia Siderurgica Nacional (NYSE:SID) is the least popular one with only 6 bullish hedge fund positions. Repligen Corporation (NASDAQ:RGEN) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. Hedge funds were also right about betting on RGEN as the stock returned -3.7% during the first quarter (through March 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
