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 821 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 Epizyme Inc (NASDAQ:EPZM)?
Is Epizyme Inc (NASDAQ:EPZM) a buy here? The best stock pickers are in a bullish mood. The number of long hedge fund bets went up by 4 lately. Our calculations also showed that EPZM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most market participants, hedge funds are assumed to be slow, old financial vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, We choose to focus on the leaders of this group, about 850 funds. Most estimates calculate that this group of people preside over bulk of all hedge funds’ total capital, and by observing their matchless equity investments, Insider Monkey has unearthed various investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
William Leland Edwards of Palo Alto Investors
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 these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a look at the fresh hedge fund action regarding Epizyme Inc (NASDAQ:EPZM).
How are hedge funds trading Epizyme Inc (NASDAQ:EPZM)?
At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the fourth quarter of 2019. On the other hand, there were a total of 19 hedge funds with a bullish position in EPZM 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.
More specifically, Redmile Group was the largest shareholder of Epizyme Inc (NASDAQ:EPZM), with a stake worth $136 million reported as of the end of September. Trailing Redmile Group was Palo Alto Investors, which amassed a stake valued at $86.1 million. Consonance Capital Management, Rock Springs Capital Management, and Burrage Capital Management 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 Foresite Capital allocated the biggest weight to Epizyme Inc (NASDAQ:EPZM), around 17.63% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, dishing out 12.34 percent of its 13F equity portfolio to EPZM.
As one would reasonably expect, key hedge funds were leading the bulls’ herd. Rhenman & Partners Asset Management, managed by Henrik Rhenman, created the largest position in Epizyme Inc (NASDAQ:EPZM). Rhenman & Partners Asset Management had $5.4 million invested in the company at the end of the quarter. Mark Hart III’s Corriente Advisors also initiated a $3.6 million position during the quarter. The other funds with new positions in the stock are Mika Toikka’s AlphaCrest Capital Management, Matthew Strobeck’s Birchview Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s also examine hedge fund activity in other stocks similar to Epizyme Inc (NASDAQ:EPZM). We will take a look at Badger Meter, Inc. (NYSE:BMI), Hub Group Inc (NASDAQ:HUBG), Arvinas, Inc. (NASDAQ:ARVN), and NIC Inc. (NASDAQ:EGOV). This group of stocks’ market caps are similar to EPZM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BMI | 20 | 125239 | 0 |
| HUBG | 17 | 190642 | -2 |
| ARVN | 25 | 431346 | -1 |
| EGOV | 17 | 105397 | -5 |
| Average | 19.75 | 213156 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $213 million. That figure was $352 million in EPZM’s case. Arvinas, Inc. (NASDAQ:ARVN) is the most popular stock in this table. On the other hand Hub Group Inc (NASDAQ:HUBG) is the least popular one with only 17 bullish hedge fund positions. Epizyme Inc (NASDAQ:EPZM) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately EPZM wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on EPZM were disappointed as the stock returned 18% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
