Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the second quarter. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds’ top consensus picks. This year hedge funds’ top 20 stock picks outperformed the S&P 500 Index by 6.6 percentage points through May 30th. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Is Amicus Therapeutics, Inc. (NASDAQ:FOLD) an exceptional investment now? Money managers are taking a bullish view. The number of long hedge fund bets improved by 4 recently. Our calculations also showed that FOLD isn’t among the 30 most popular stocks among hedge funds. FOLD was in 30 hedge funds’ portfolios at the end of the first quarter of 2019. There were 26 hedge funds in our database with FOLD positions at the end of the previous quarter.
At the moment there are many metrics stock traders can use to size up their stock investments. A duo of the less known metrics are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the market by a healthy amount (see the details here).
Let’s take a look at the new hedge fund action surrounding Amicus Therapeutics, Inc. (NASDAQ:FOLD).
How have hedgies been trading Amicus Therapeutics, Inc. (NASDAQ:FOLD)?
Heading into the second quarter of 2019, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in FOLD over the last 15 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Perceptive Advisors held the most valuable stake in Amicus Therapeutics, Inc. (NASDAQ:FOLD), which was worth $294.3 million at the end of the first quarter. On the second spot was Redmile Group which amassed $266.8 million worth of shares. Moreover, venBio Select Advisor, Palo Alto Investors, and Citadel Investment Group were also bullish on Amicus Therapeutics, Inc. (NASDAQ:FOLD), allocating a large percentage of their portfolios to this stock.
Consequently, some big names have been driving this bullishness. Osterweis Capital Management, managed by John Osterweis, created the biggest position in Amicus Therapeutics, Inc. (NASDAQ:FOLD). Osterweis Capital Management had $6.2 million invested in the company at the end of the quarter. David Rosen’s Rubric Capital Management also initiated a $5 million position during the quarter. The other funds with brand new FOLD positions are Eric Bannasch’s Cadian Capital, Brad Farber’s Atika Capital, and Michael S. Weiss and Lindsay A. Rosenwald’s Opus Point Partners Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Amicus Therapeutics, Inc. (NASDAQ:FOLD) but similarly valued. These stocks are Tegna Inc (NYSE:TGNA), Boyd Gaming Corporation (NYSE:BYD), MOGU Inc. (NYSE:MOG), and Kennametal Inc. (NYSE:KMT). This group of stocks’ market values resemble FOLD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TGNA | 26 | 470360 | 4 |
| BYD | 28 | 404116 | -2 |
| MOG | 17 | 90968 | 4 |
| KMT | 20 | 271144 | -1 |
| Average | 22.75 | 309147 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.75 hedge funds with bullish positions and the average amount invested in these stocks was $309 million. That figure was $1047 million in FOLD’s case. Boyd Gaming Corporation (NYSE:BYD) is the most popular stock in this table. On the other hand MOGU Inc. (NYSE:MOG) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Amicus Therapeutics, Inc. (NASDAQ:FOLD) 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 FOLD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on FOLD were disappointed as the stock returned -19.4% 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.
