At Insider Monkey, we pore over the filings of nearly 887 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of December 31st. In this article, we will use that wealth of knowledge to determine whether or not Incyte Corporation (NASDAQ:INCY) makes for a good investment right now.
Is INCY stock a buy? The smart money was getting more optimistic. The number of long hedge fund bets increased by 2 in recent months. Incyte Corporation (NASDAQ:INCY) was in 37 hedge funds’ portfolios at the end of December. The all time high for this statistic is 53. Our calculations also showed that INCY isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 35 hedge funds in our database with INCY holdings at the end of September.
In today’s marketplace there are several gauges stock traders put to use to grade publicly traded companies. Some of the less known gauges are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the elite money managers can outclass their index-focused peers by a healthy amount (see the details here).
Felix Baker of Baker Bros.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 we’re going to check out the fresh hedge fund action regarding Incyte Corporation (NASDAQ:INCY).
Do Hedge Funds Think INCY Is A Good Stock To Buy Now?
At Q4’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards INCY over the last 22 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the number one position in Incyte Corporation (NASDAQ:INCY). Baker Bros. Advisors has a $2.7833 billion position in the stock, comprising 10.5% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $512.2 million position; 0.6% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish encompass Catherine D. Wood’s ARK Investment Management, John Overdeck and David Siegel’s Two Sigma Advisors and Steven Boyd’s Armistice Capital. In terms of the portfolio weights assigned to each position Baker Bros. Advisors allocated the biggest weight to Incyte Corporation (NASDAQ:INCY), around 10.49% of its 13F portfolio. Bridger Management is also relatively very bullish on the stock, setting aside 2.68 percent of its 13F equity portfolio to INCY.
As aggregate interest increased, some big names have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the largest position in Incyte Corporation (NASDAQ:INCY). Citadel Investment Group had $21.2 million invested in the company at the end of the quarter. Michael Rockefeller and Karl Kroeker’s Woodline Partners also initiated a $11 million position during the quarter. The following funds were also among the new INCY investors: Prashanth Jayaram’s Tri Locum Partners, Krishen Sud’s Sivik Global Healthcare, and Sander Gerber’s Hudson Bay Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Incyte Corporation (NASDAQ:INCY) but similarly valued. These stocks are Vipshop Holdings Limited (NYSE:VIPS), ORIX Corporation (NYSE:IX), Ingersoll Rand Inc. (NYSE:IR), Qorvo Inc (NASDAQ:QRVO), TransUnion (NYSE:TRU), CDW Corporation (NASDAQ:CDW), and ZoomInfo Technologies Inc. (NASDAQ:ZI). This group of stocks’ market caps are similar to INCY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIPS | 27 | 524692 | 3 |
| IX | 3 | 4453 | -1 |
| IR | 34 | 939520 | 8 |
| QRVO | 51 | 2122157 | 0 |
| TRU | 41 | 2025227 | -6 |
| CDW | 43 | 1622545 | 13 |
| ZI | 31 | 327082 | 9 |
| Average | 32.9 | 1080811 | 3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $1081 million. That figure was $3891 million in INCY’s case. Qorvo Inc (NASDAQ:QRVO) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 3 bullish hedge fund positions. Incyte Corporation (NASDAQ:INCY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INCY is 63.4. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and beat the market again by 0.4 percentage points. Unfortunately INCY wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on INCY were disappointed as the stock returned -4.6% since the end of December (through 4/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
