The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards BioMarin Pharmaceutical Inc. (NASDAQ:BMRN).
Is BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) going to take off soon? The best stock pickers are selling. The number of long hedge fund positions dropped by 1 in recent months. Our calculations also showed that BMRN isn’t among the 30 most popular stocks among hedge funds. BMRN was in 40 hedge funds’ portfolios at the end of September. There were 41 hedge funds in our database with BMRN holdings at the end of the previous quarter.
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 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 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 review the latest hedge fund action regarding BioMarin Pharmaceutical Inc. (NASDAQ:BMRN).
How are hedge funds trading BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)?
Heading into the fourth quarter of 2018, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of -2% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards BMRN over the last 13 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the number one position in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN). Baker Bros. Advisors has a $735.3 million position in the stock, comprising 4.8% of its 13F portfolio. Coming in second is Viking Global, led by Andreas Halvorsen, holding a $400.4 million position; 2.2% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism consist of William Leland Edwards’s Palo Alto Investors, Ken Griffin’s Citadel Investment Group and Behzad Aghazadeh’s venBio Select Advisor.
Since BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) has faced a decline in interest from hedge fund managers, it’s easy to see that there was a specific group of hedgies that decided to sell off their entire stakes by the end of the third quarter. At the top of the heap, Doug Silverman and Alexander Klabin’s Senator Investment Group dropped the largest stake of all the hedgies watched by Insider Monkey, comprising close to $94.2 million in call options. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its call options, about $34.7 million worth. These transactions are interesting, as total hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to BioMarin Pharmaceutical Inc. (NASDAQ:BMRN). We will take a look at Pembina Pipeline Corp (NYSE:PBA), Western Digital Corporation (NASDAQ:WDC), Korea Electric Power Corporation (NYSE:KEP), and Ulta Beauty, Inc. (NASDAQ:ULTA). All of these stocks’ market caps resemble BMRN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PBA | 17 | 156625 | 4 |
| WDC | 33 | 1201913 | -10 |
| KEP | 4 | 33627 | -4 |
| ULTA | 40 | 830823 | -4 |
| Average | 23.5 | 555747 | -3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $556 million. That figure was $2.25 billion in BMRN’s case. Ulta Beauty, Inc. (NASDAQ:ULTA) is the most popular stock in this table. On the other hand Korea Electric Power Corporation (NYSE:KEP) is the least popular one with only 4 bullish hedge fund positions. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) 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 ULTA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
