Is Zogenix, Inc. (NASDAQ:ZGNX) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Zogenix, Inc. (NASDAQ:ZGNX) investors should be aware of an increase in hedge fund sentiment lately. ZGNX was in 37 hedge funds’ portfolios at the end of the first quarter of 2019. There were 35 hedge funds in our database with ZGNX holdings at the end of the previous quarter. Our calculations also showed that zgnx isn’t among the 30 most popular stocks among hedge funds.
At the moment there are numerous tools shareholders can use to assess publicly traded companies. Two of the most under-the-radar tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outperform the market by a superb margin (see the details here).
Let’s take a peek at the key hedge fund action regarding Zogenix, Inc. (NASDAQ:ZGNX).
How are hedge funds trading Zogenix, Inc. (NASDAQ:ZGNX)?
At Q1’s end, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the previous quarter. By comparison, 31 hedge funds held shares or bullish call options in ZGNX a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Perceptive Advisors held the most valuable stake in Zogenix, Inc. (NASDAQ:ZGNX), which was worth $212.9 million at the end of the first quarter. On the second spot was RA Capital Management which amassed $131 million worth of shares. Moreover, Farallon Capital, venBio Select Advisor, and Scopia Capital were also bullish on Zogenix, Inc. (NASDAQ:ZGNX), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers have jumped into Zogenix, Inc. (NASDAQ:ZGNX) headfirst. Point72 Asset Management, managed by Steve Cohen, created the biggest position in Zogenix, Inc. (NASDAQ:ZGNX). Point72 Asset Management had $7.8 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $1.4 million position during the quarter. The other funds with new positions in the stock are Minhua Zhang’s Weld Capital Management and Michael S. Weiss and Lindsay A. Rosenwald’s Opus Point Partners Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Zogenix, Inc. (NASDAQ:ZGNX) but similarly valued. These stocks are Portola Pharmaceuticals Inc (NASDAQ:PTLA), Gol Linhas Aereas Inteligentes SA (NYSE:GOL), The Geo Group, Inc. (NYSE:GEO), and GreenSky, Inc. (NASDAQ:GSKY). All of these stocks’ market caps resemble ZGNX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PTLA | 20 | 402952 | 6 |
| GOL | 16 | 193692 | 7 |
| GEO | 18 | 117240 | 0 |
| GSKY | 15 | 68872 | -5 |
| Average | 17.25 | 195689 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $196 million. That figure was $1112 million in ZGNX’s case. Portola Pharmaceuticals Inc (NASDAQ:PTLA) is the most popular stock in this table. On the other hand GreenSky, Inc. (NASDAQ:GSKY) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Zogenix, Inc. (NASDAQ:ZGNX) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately ZGNX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ZGNX were disappointed as the stock returned -32.2% during the same 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
