World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
PTC Therapeutics, Inc. (NASDAQ:PTCT) has experienced an increase in enthusiasm from smart money lately. PTCT was in 31 hedge funds’ portfolios at the end of March. There were 25 hedge funds in our database with PTCT holdings at the end of the previous quarter. Our calculations also showed that ptct isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to go over the latest hedge fund action encompassing PTC Therapeutics, Inc. (NASDAQ:PTCT).
What have hedge funds been doing with PTC Therapeutics, Inc. (NASDAQ:PTCT)?
Heading into the second quarter of 2019, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 24% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PTCT over the last 15 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Point72 Asset Management was the largest shareholder of PTC Therapeutics, Inc. (NASDAQ:PTCT), with a stake worth $109.4 million reported as of the end of March. Trailing Point72 Asset Management was Scopia Capital, which amassed a stake valued at $79.3 million. Citadel Investment Group, Great Point Partners, and OrbiMed Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, key money managers have jumped into PTC Therapeutics, Inc. (NASDAQ:PTCT) headfirst. Partner Fund Management, managed by Christopher James, created the biggest position in PTC Therapeutics, Inc. (NASDAQ:PTCT). Partner Fund Management had $40.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $9.8 million investment in the stock during the quarter. The other funds with new positions in the stock are James E. Flynn’s Deerfield Management, Dinakar Singh’s TPG-AXON Management LP, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s also examine hedge fund activity in other stocks similar to PTC Therapeutics, Inc. (NASDAQ:PTCT). We will take a look at Shake Shack Inc (NYSE:SHAK), First Midwest Bancorp Inc (NASDAQ:FMBI), NetScout Systems, Inc. (NASDAQ:NTCT), and RH (NYSE:RH). This group of stocks’ market valuations are closest to PTCT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SHAK | 19 | 380847 | 0 |
| FMBI | 13 | 49554 | 1 |
| NTCT | 12 | 97736 | -2 |
| RH | 36 | 260836 | 8 |
| Average | 20 | 197243 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $647 million in PTCT’s case. RH (NYSE:RH) is the most popular stock in this table. On the other hand NetScout Systems, Inc. (NASDAQ:NTCT) is the least popular one with only 12 bullish hedge fund positions. PTC Therapeutics, Inc. (NASDAQ:PTCT) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on PTCT as the stock returned 8.9% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
