You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
In this article, let’s talk about the smart money sentiment towards Eagle Pharmaceuticals Inc (NASDAQ:EGRX). Last quarter, the stock registered a decrease in support from investors tracked by Insider Monkey, as 16 funds held long positions in EGRX at the end of September, compared to 21 funds at the end of June. 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 Jumei International Holding Ltd (ADR) (NYSE:JMEI), National Bank Holdings Corp (NYSE:NBHC), and Teekay Corporation (NYSE:TK) to gather more data points.
Follow Eagle Pharmaceuticals Inc. (NASDAQ:EGRX)
Follow Eagle Pharmaceuticals Inc. (NASDAQ:EGRX)
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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Keeping this in mind, we’re going to take a glance at the fresh action surrounding Eagle Pharmaceuticals Inc (NASDAQ:EGRX).
Hedge fund activity in Eagle Pharmaceuticals Inc (NASDAQ:EGRX)
Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were long Eagle Pharmaceuticals Inc (NASDAQ:EGRX), which represents a fall of 24% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards EGRX over the last five quarters. So, let’s find 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, Samuel Isaly’s OrbiMed Advisors has the number one position in Eagle Pharmaceuticals Inc (NASDAQ:EGRX), worth close to $72.5 million. Coming in second is Douglas Braunstein and James Woolery’s Hudson Executive Capital, which holds a $66.5 million position; 12% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism comprise Peter S. Park’s Park West Asset Management, Bihua Chen’s Cormorant Asset Management, and Zach Schreiber’s Point State Capital. 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.
Due to the fact that Eagle Pharmaceuticals Inc (NASDAQ:EGRX) has faced a decline in interest from hedge fund managers, logic holds that there is a sect of hedgies that slashed their positions entirely in the third quarter. Interestingly, Jeffrey Jay and David Kroin’s Great Point Partners dumped the largest stake of all the investors watched by Insider Monkey, totaling about $21.3 million in stock. Mitchell Blutt’s fund, Consonance Capital Management, also dumped its stock, valued at about $18.7 million.
Let’s go over hedge fund activity in other stocks similar to Eagle Pharmaceuticals Inc (NASDAQ:EGRX). These stocks are Jumei International Holding Ltd (ADR) (NYSE:JMEI), National Bank Holdings Corp (NYSE:NBHC), Teekay Corporation (NYSE:TK), and Sunrun Inc (NASDAQ:RUN). This group of stocks’ market valuations match EGRX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JMEI | 10 | 32002 | 0 |
| NBHC | 10 | 62236 | 0 |
| TK | 12 | 69990 | -3 |
| RUN | 11 | 62462 | 0 |
As you can see these stocks had an average of 11 funds with bullish positions and the average amount invested in these stocks was $57 million, which is lower than the $267 million figure in EGRX’s case. Teekay Corporation (NYSE:TK) is the most popular stock in this table. On the other hand Jumei International Holding Ltd (ADR) (NYSE:JMEI) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Eagle Pharmaceuticals Inc (NASDAQ:EGRX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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