Hedge Funds Are Warming Up To Jazz Pharmaceuticals Plc (JAZZ)

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 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Jazz Pharmaceuticals Plc (NASDAQ:JAZZ)?

Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) investors should be aware of an increase in hedge fund interest lately. Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) was in 37 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 49. Our calculations also showed that JAZZ isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Phillip Gross of Adage Capital

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 battery 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. With all of this in mind let’s view the new hedge fund action encompassing Jazz Pharmaceuticals Plc (NASDAQ:JAZZ).

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

At the end of the first quarter, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from one quarter earlier. By comparison, 29 hedge funds held shares or bullish call options in JAZZ a year ago. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies has the largest position in Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), worth close to $437.7 million, comprising 0.5% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $221.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions contain Cliff Asness’s AQR Capital Management, Jeremy Green’s Redmile Group and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Tri Locum Partners allocated the biggest weight to Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), around 4.5% of its 13F portfolio. Rhenman & Partners Asset Management is also relatively very bullish on the stock, earmarking 2.87 percent of its 13F equity portfolio to JAZZ.

As industrywide interest jumped, key hedge funds have jumped into Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) headfirst. Redmile Group, managed by Jeremy Green, assembled the biggest position in Jazz Pharmaceuticals Plc (NASDAQ:JAZZ). Redmile Group had $136.3 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also made a $32.9 million investment in the stock during the quarter. The other funds with brand new JAZZ positions are Charles Clough’s Clough Capital Partners, Prashanth Jayaram’s Tri Locum Partners, and Neil Shahrestani’s Ikarian Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) but similarly valued. These stocks are First Solar, Inc. (NASDAQ:FSLR), Pegasystems Inc. (NASDAQ:PEGA), Companhia Siderurgica Nacional (NYSE:SID), WEX Inc (NYSE:WEX), NRG Energy Inc (NYSE:NRG), Under Armour Inc (NYSE:UA), and The Middleby Corporation (NASDAQ:MIDD). This group of stocks’ market values resemble JAZZ’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $953 million. That figure was $1260 million in JAZZ’s case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand Companhia Siderurgica Nacional (NYSE:SID) is the least popular one with only 10 bullish hedge fund positions. Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JAZZ is 65.6. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on JAZZ, though not to the same extent, as the stock returned 10.2% since Q1 (through June 25th) and outperformed the market as well.

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