Is Amicus Therapeutics, Inc. (FOLD) A Good Stock To Buy?

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.

Amicus Therapeutics, Inc. (NASDAQ:FOLD) has seen a decrease in enthusiasm from smart money in recent months. FOLD was in 21 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with FOLD holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Atlantic Tele-Network, Inc. (NASDAQ:ATNI), Callidus Software Inc. (NASDAQ:CALD), and Gran Tierra Energy Inc. (NYSEAMEX:GTE) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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With all of this in mind, we’re going to check out the key action regarding Amicus Therapeutics, Inc. (NASDAQ:FOLD).

Hedge fund activity in Amicus Therapeutics, Inc. (NASDAQ:FOLD)

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 9% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in FOLD at the beginning of this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Joseph Edelman’s Perceptive Advisors has the biggest position in Amicus Therapeutics, Inc. (NASDAQ:FOLD), worth close to $104.5 million, accounting for 6.7% of its total 13F portfolio. The second largest stake is held by Redmile Group, led by Jeremy Green, which holds a $94.4 million position; the fund has 7.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish comprise William Leland Edwards’ Palo Alto Investors, Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management and Behzad Aghazadeh’s venBio Select Advisor. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Seeing as Amicus Therapeutics, Inc. (NASDAQ:FOLD) has faced declining sentiment from the smart money, it’s safe to say that there exists a select few funds who sold off their entire stakes heading into Q4. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management got rid of the largest position of the 700 funds watched by Insider Monkey, valued at close to $1.6 million in stock. Millennium Management also dumped its stock, about $0.7 million worth.

Let’s go over hedge fund activity in other stocks similar to Amicus Therapeutics, Inc. (NASDAQ:FOLD). These stocks are Atlantic Tele-Network, Inc. (NASDAQ:ATNI), Callidus Software Inc. (NASDAQ:CALD), Gran Tierra Energy Inc. (NYSEAMEX:GTE), and Mimecast Ltd (NASDAQ:MIME). All of these stocks’ market caps resemble FOLD’s market cap.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $125 million. That figure was $373 million in FOLD’s case. Gran Tierra Energy Inc. (NYSEAMEX:GTE) is the most popular stock in this table. On the other hand Atlantic Tele-Network, Inc. (NASDAQ:ATNI) is the least popular one with only 10 bullish hedge fund positions. Amicus Therapeutics, Inc. (NASDAQ:FOLD) 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 GTE might be a better candidate to consider taking a long position in.

Disclosure: None