In this article we will analyze whether Corcept Therapeutics Incorporated (NASDAQ:CORT) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is CORT a good stock to buy now? Hedge funds were cutting their exposure. The number of bullish hedge fund positions shrunk by 1 in recent months. Corcept Therapeutics Incorporated (NASDAQ:CORT) was in 22 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 23. Our calculations also showed that CORT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let’s go over the recent hedge fund action regarding Corcept Therapeutics Incorporated (NASDAQ:CORT).
Do Hedge Funds Think CORT Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CORT over the last 21 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, Renaissance Technologies was the largest shareholder of Corcept Therapeutics Incorporated (NASDAQ:CORT), with a stake worth $167.2 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $16.4 million. GLG Partners, Marshall Wace LLP, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Corcept Therapeutics Incorporated (NASDAQ:CORT), around 1.22% of its 13F portfolio. Birchview Capital is also relatively very bullish on the stock, setting aside 0.58 percent of its 13F equity portfolio to CORT.
Because Corcept Therapeutics Incorporated (NASDAQ:CORT) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds who were dropping their entire stakes in the third quarter. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp sold off the largest stake of the 750 funds monitored by Insider Monkey, valued at an estimated $1.3 million in stock, and Bruce Kovner’s Caxton Associates LP was right behind this move, as the fund said goodbye to about $0.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Corcept Therapeutics Incorporated (NASDAQ:CORT). These stocks are Red Rock Resorts, Inc. (NASDAQ:RRR), Alliance Data Systems Corporation (NYSE:ADS), Spirit AeroSystems Holdings, Inc. (NYSE:SPR), BancorpSouth Bank (NYSE:BXS), Insight Enterprises, Inc. (NASDAQ:NSIT), Lions Gate Entertainment Corporation (NYSE:LGF-B), and BRP Group, Inc. (NASDAQ:BRP). This group of stocks’ market values are similar to CORT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RRR | 29 | 361467 | -1 |
| ADS | 36 | 427033 | 7 |
| SPR | 31 | 468951 | -6 |
| BXS | 19 | 33217 | 9 |
| NSIT | 22 | 66764 | 2 |
| LGF-B | 22 | 246159 | -4 |
| BRP | 10 | 45833 | -6 |
| Average | 24.1 | 235632 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $236 million. That figure was $238 million in CORT’s case. Alliance Data Systems Corporation (NYSE:ADS) is the most popular stock in this table. On the other hand BRP Group, Inc. (NASDAQ:BRP) is the least popular one with only 10 bullish hedge fund positions. Corcept Therapeutics Incorporated (NASDAQ:CORT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CORT is 55.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on CORT as the stock returned 47.3% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
