The market has been volatile as the Federal Reserve winds down its easy money policies. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25th and the end of October. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Portola Pharmaceuticals Inc (NASDAQ:PTLA) and find out how it is affected by hedge funds’ moves.
Portola Pharmaceuticals Inc (NASDAQ:PTLA) investors should pay attention to an increase in hedge fund sentiment in recent months. 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 CONSOL Energy Inc. (NYSE:CNX), Cooper Tire & Rubber Company (NYSE:CTB), and Primerica, Inc. (NYSE:PRI) to gather more data points.
Follow Portola Pharmaceuticals Inc (NASDAQ:PTLA)
Follow Portola Pharmaceuticals Inc (NASDAQ:PTLA)
At the moment there are many indicators stock market investors can use to appraise publicly traded companies. A duo of the less utilized indicators are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best hedge fund managers can beat the market by a solid margin (see the details here).
Keeping this in mind, we’re going to review the recent action surrounding Portola Pharmaceuticals Inc (NASDAQ:PTLA).
How have hedgies been trading Portola Pharmaceuticals Inc (NASDAQ:PTLA)?
Heading into Q4, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jeremy Green’s Redmile Group has the most valuable position in Portola Pharmaceuticals Inc (NASDAQ:PTLA), worth close to $392 million, accounting for 9% of its total 13F portfolio. Coming in second is Ken Griffin’s Citadel Investment Group, with a $51 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. The remaining members of the smart money with similar optimism contain Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Israel Englander’s Millennium Management, and Samuel Isaly’s OrbiMed Advisors.
As aggregate interest increased, some big names were leading the bulls’ herd. Cupps Capital Management, managed by Drew Cupps, established the biggest position in Portola Pharmaceuticals Inc (NASDAQ:PTLA). Cupps Capital Management had $3.6 million invested in the company at the end of the quarter. Paul Tudor Jones’ Tudor Investment Corp also initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Hal Mintz’s Sabby Capital, Vishal Saluja and Pham Quang’s Endurant Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Portola Pharmaceuticals Inc (NASDAQ:PTLA) but similarly valued. These stocks are CONSOL Energy Inc. (NYSE:CNX), Cooper Tire & Rubber Company (NYSE:CTB), Primerica, Inc. (NYSE:PRI), and Banco Macro SA (ADR) (NYSE:BMA). All of these stocks’ market caps match PTLA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNX | 25 | 893960 | 2 |
| CTB | 23 | 121036 | -3 |
| PRI | 15 | 265573 | -3 |
| BMA | 13 | 66701 | -1 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $337 million, which is lower than the $700 million in PTLA’s case. CONSOL Energy Inc. (NYSE:CNX) is the most popular stock in this table. On the other hand Banco Macro SA (ADR) (NYSE:BMA) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Portola Pharmaceuticals Inc (NASDAQ:PTLA) 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.
