Is Eagle Pharmaceuticals Inc (NASDAQ:EGRX) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Eagle Pharmaceuticals Inc (NASDAQ:EGRX)’s stock surged by more than 400% in the first six months of 2015, but it inched down in the third quarter and the interest towards the stock declined. The company was in 15 hedge funds’ portfolios at the end of September, versus 19 hedge funds in our database with EGRX holdings at the end of the previous quarter. At the end of this article we will also compare EGRX to other stocks, including Federal-Mogul Corporation (NASDAQ:FDML), Seres Therapeutics Inc (NASDAQ:MCRB), and NuStar GP Holdings, LLC (NYSE:NSH) to get a better sense of its popularity.
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To the average investor, there are a multitude of indicators investors employ to appraise their stock investments. A duo of the less known indicators are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outclass the market by a very impressive margin (see the details here).
Now, let’s view the new action surrounding Eagle Pharmaceuticals Inc (NASDAQ:EGRX).
What have hedge funds been doing with Eagle Pharmaceuticals Inc (NASDAQ:EGRX)?
Heading into Q4, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 21% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Consonance Capital Management, managed by Mitchell Blutt, holds the most valuable position in Eagle Pharmaceuticals Inc (NASDAQ:EGRX). Consonance Capital Management has a $100.2 million position in the stock, comprising 14.1% of its 13F portfolio. The second largest stake is held by Park West Asset Management, managed by Peter S. Park, which holds a $37.1 million position; the fund has 3.4% of its 13F portfolio invested in the stock. Remaining peers that hold long positions contain Bihua Chen’s Cormorant Asset Management, James Dondero’s Highland Capital Management, and Joseph Edelman’s Perceptive Advisors.
Seeing as Eagle Pharmaceuticals Inc (NASDAQ:EGRX) has faced falling interest from the aggregate hedge fund industry, we can see that there were a few fund managers who sold off their positions entirely in the third quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP cut the biggest stake of the 700 funds tracked by Insider Monkey, totaling close to $3.8 million in stock. Renaissance Technologies, also dumped its stock, about $1.9 million worth.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Eagle Pharmaceuticals Inc (NASDAQ:EGRX) but similarly valued. These stocks are Federal-Mogul Corporation (NASDAQ:FDML), Seres Therapeutics Inc (NASDAQ:MCRB), NuStar GP Holdings, LLC (NYSE:NSH), and SPS Commerce, Inc. (NASDAQ:SPSC). This group of stocks’ market valuations are similar to EGRX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FDML | 14 | 1009725 | 0 |
| MCRB | 10 | 43115 | -3 |
| NSH | 9 | 45758 | 0 |
| SPSC | 7 | 43516 | -4 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $286 million. That figure was $211 million in EGRX’s case. Federal-Mogul Corporation (NASDAQ:FDML) is the most popular stock in this table. On the other hand SPS Commerce, Inc. (NASDAQ:SPSC) is the least popular one with only 7 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.
