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 September 30, so let’s proceed with the discussion of the hedge fund sentiment on SAGE Therapeutics Inc (NASDAQ:SAGE).
Is SAGE Therapeutics Inc (NASDAQ:SAGE) undervalued? The smart money is getting less bullish. The number of bullish hedge fund positions shrunk by 1 lately. Our calculations also showed that sage isn’t among the 30 most popular stocks among hedge funds. SAGE was in 37 hedge funds’ portfolios at the end of September. There were 38 hedge funds in our database with SAGE positions at the end of the previous quarter.
To most market participants, hedge funds are viewed as unimportant, old investment vehicles of yesteryear. While there are more than 8,000 funds trading at the moment, Our experts hone in on the moguls of this club, approximately 700 funds. These hedge fund managers administer the lion’s share of all hedge funds’ total asset base, and by observing their inimitable picks, Insider Monkey has spotted many investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by 6 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
We’re going to take a look at the key hedge fund action encompassing SAGE Therapeutics Inc (NASDAQ:SAGE).
Hedge fund activity in SAGE Therapeutics Inc (NASDAQ:SAGE)
Heading into the fourth quarter of 2018, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the second quarter of 2018. On the other hand, there were a total of 38 hedge funds with a bullish position in SAGE at the beginning of this year. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in SAGE Therapeutics Inc (NASDAQ:SAGE) was held by Palo Alto Investors, which reported holding $118.7 million worth of stock at the end of September. It was followed by Farallon Capital with a $88.3 million position. Other investors bullish on the company included Baker Bros. Advisors, Millennium Management, and RA Capital Management.
Judging by the fact that SAGE Therapeutics Inc (NASDAQ:SAGE) has faced bearish sentiment from hedge fund managers, logic holds that there were a few fund managers that slashed their positions entirely by the end of the third quarter. Intriguingly, Ori Hershkovitz’s Nexthera Capital sold off the biggest investment of the “upper crust” of funds followed by Insider Monkey, worth about $12.4 million in stock. Leon Cooperman’s fund, Omega Advisors, also cut its stock, about $11.7 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to SAGE Therapeutics Inc (NASDAQ:SAGE). These stocks are Alkermes Plc (NASDAQ:ALKS), Aqua America Inc (NYSE:WTR), Jones Lang LaSalle Inc (NYSE:JLL), and Omega Healthcare Investors Inc (NYSE:OHI). This group of stocks’ market valuations match SAGE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALKS | 16 | 159863 | -1 |
| WTR | 13 | 132708 | 0 |
| JLL | 21 | 858022 | 3 |
| OHI | 12 | 41625 | 2 |
| Average | 15.5 | 298055 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $298 million. That figure was $602 million in SAGE’s case. Jones Lang LaSalle Inc (NYSE:JLL) is the most popular stock in this table. On the other hand Omega Healthcare Investors Inc (NYSE:OHI) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks SAGE Therapeutics Inc (NASDAQ:SAGE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
