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. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX).
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) investors should be aware of a decrease in hedge fund interest recently. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) was in 60 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 68. There were 68 hedge funds in our database with VRTX holdings at the end of March. Our calculations also showed that VRTX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Kamran Moghtaderi of Eversept Partners
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 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. 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 we’re going to take a peek at the latest hedge fund action encompassing Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX).
Do Hedge Funds Think VRTX Is A Good Stock To Buy Now?
At the end of June, a total of 60 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VRTX over the last 24 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), which was worth $459.2 million at the end of the second quarter. On the second spot was ARK Investment Management which amassed $357.7 million worth of shares. OrbiMed Advisors, GLG Partners, and Avoro Capital Advisors (venBio Select Advisor) 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 Copernicus Capital Management allocated the biggest weight to Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), around 28.62% of its 13F portfolio. HealthInvest Partners AB is also relatively very bullish on the stock, dishing out 9.94 percent of its 13F equity portfolio to VRTX.
Seeing as Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) has experienced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers that decided to sell off their positions entirely in the second quarter. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, comprising an estimated $20.6 million in stock. Philip Hempleman’s fund, Ardsley Partners, also dropped its stock, about $15 million worth. These moves are important to note, as total hedge fund interest was cut by 8 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). We will take a look at Biogen Inc. (NASDAQ:BIIB), Carvana Co. (NYSE:CVNA), ING Groep N.V. (NYSE:ING), UBS Group AG (NYSE:UBS), Relx PLC (NYSE:RELX), Roblox Corporation (NYSE:RBLX), and Canadian Pacific Railway Limited (NYSE:CP). This group of stocks’ market values are closest to VRTX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BIIB | 67 | 3116691 | 4 |
| CVNA | 63 | 8904829 | -1 |
| ING | 9 | 601603 | -1 |
| UBS | 15 | 176356 | -1 |
| RELX | 6 | 58838 | 2 |
| RBLX | 49 | 4914667 | 3 |
| CP | 25 | 6353608 | -8 |
| Average | 33.4 | 3446656 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $3447 million. That figure was $2809 million in VRTX’s case. Biogen Inc. (NASDAQ:BIIB) is the most popular stock in this table. On the other hand Relx PLC (NYSE:RELX) is the least popular one with only 6 bullish hedge fund positions. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VRTX is 67.7. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately VRTX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VRTX were disappointed as the stock returned -9% since the end of June (through 9/27) 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.
Follow Vertex Pharmaceuticals Inc / Ma (NASDAQ:VRTX)
Follow Vertex Pharmaceuticals Inc / Ma (NASDAQ:VRTX)
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Disclosure: None. This article was originally published at Insider Monkey.
