“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Supernus Pharmaceuticals Inc (NASDAQ:SUPN) and see how it was affected.
Is Supernus Pharmaceuticals Inc (NASDAQ:SUPN) a sound investment today? Prominent investors are reducing their bets on the stock. The number of bullish hedge fund positions shrunk by 3 recently. Our calculations also showed that SUPN isn’t among the 30 most popular stocks among hedge funds. SUPN was in 14 hedge funds’ portfolios at the end of the third quarter of 2018. There were 17 hedge funds in our database with SUPN positions at the end of the previous quarter.
In the 21st century investor’s toolkit there are many tools stock market investors use to analyze their holdings. A duo of the less utilized tools are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best money managers can trounce the S&P 500 by a solid margin (see the details here).
Let’s take a glance at the fresh hedge fund action encompassing Supernus Pharmaceuticals Inc (NASDAQ:SUPN).
How have hedgies been trading Supernus Pharmaceuticals Inc (NASDAQ:SUPN)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in SUPN heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Supernus Pharmaceuticals Inc (NASDAQ:SUPN), which was worth $23.6 million at the end of the third quarter. On the second spot was Millennium Management which amassed $11.7 million worth of shares. Moreover, GLG Partners, AQR Capital Management, and AlphaOne Capital Partners were also bullish on Supernus Pharmaceuticals Inc (NASDAQ:SUPN), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Supernus Pharmaceuticals Inc (NASDAQ:SUPN) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of fund managers that elected to cut their entire stakes in the third quarter. At the top of the heap, Chuck Royce’s Royce & Associates sold off the biggest position of the 700 funds watched by Insider Monkey, worth an estimated $3.5 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund sold off about $0.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Supernus Pharmaceuticals Inc (NASDAQ:SUPN). These stocks are AMC Entertainment Holdings Inc (NYSE:AMC), Crestwood Equity Partners LP (NYSE:CEQP), HB Fuller Co (NYSE:FUL), and Halozyme Therapeutics, Inc. (NASDAQ:HALO). This group of stocks’ market caps match SUPN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMC | 21 | 159127 | 7 |
| CEQP | 4 | 35008 | -2 |
| FUL | 8 | 137229 | -5 |
| HALO | 21 | 294565 | 2 |
| Average | 13.5 | 156482 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $60 million in SUPN’s case. AMC Entertainment Holdings Inc (NYSE:AMC) is the most popular stock in this table. On the other hand Crestwood Equity Partners LP (NYSE:CEQP) is the least popular one with only 4 bullish hedge fund positions. Supernus Pharmaceuticals Inc (NASDAQ:SUPN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AMC might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
