In this article we will check out the progression of hedge fund sentiment towards Regeneron Pharmaceuticals Inc (NASDAQ:REGN) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is REGN a good stock to buy? Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 49. REGN has experienced a decrease in hedge fund sentiment lately. There were 48 hedge funds in our database with REGN holdings at the end of June. Our calculations also showed that REGN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s take a look at the recent hedge fund action regarding Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
Do Hedge Funds Think REGN Is A Good Stock To Buy Now?
At third quarter’s end, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in REGN over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was held by ARK Investment Management, which reported holding $259.1 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $182.2 million position. Other investors bullish on the company included AQR Capital Management, D E Shaw, and Polar Capital. In terms of the portfolio weights assigned to each position Bronte Capital allocated the biggest weight to Regeneron Pharmaceuticals Inc (NASDAQ:REGN), around 5.5% of its 13F portfolio. Tri Locum Partners is also relatively very bullish on the stock, designating 3.35 percent of its 13F equity portfolio to REGN.
Judging by the fact that Regeneron Pharmaceuticals Inc (NASDAQ:REGN) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds that elected to cut their entire stakes by the end of the third quarter. It’s worth mentioning that Arthur B Cohen and Joseph Healey’s Healthcor Management LP sold off the biggest investment of all the hedgies monitored by Insider Monkey, worth about $106.3 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund dumped about $105.4 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 4 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Regeneron Pharmaceuticals Inc (NASDAQ:REGN). These stocks are Intercontinental Exchange Inc (NYSE:ICE), Bank of Montreal (NYSE:BMO), Aon plc (NYSE:AON), Colgate-Palmolive Company (NYSE:CL), Illumina, Inc. (NASDAQ:ILMN), Waste Management, Inc. (NYSE:WM), and Autodesk, Inc. (NASDAQ:ADSK). This group of stocks’ market values are closest to REGN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICE | 48 | 2832226 | 1 |
| BMO | 12 | 142342 | 0 |
| AON | 47 | 6005008 | -21 |
| CL | 54 | 2577652 | -4 |
| ILMN | 55 | 2801228 | 4 |
| WM | 36 | 3629155 | -3 |
| ADSK | 54 | 2356939 | -10 |
| Average | 43.7 | 2906364 | -4.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.7 hedge funds with bullish positions and the average amount invested in these stocks was $2906 million. That figure was $1318 million in REGN’s case. Illumina, Inc. (NASDAQ:ILMN) is the most popular stock in this table. On the other hand Bank of Montreal (NYSE:BMO) is the least popular one with only 12 bullish hedge fund positions. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for REGN is 65.1. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately REGN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on REGN were disappointed as the stock returned 5.2% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)
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Disclosure: None. This article was originally published at Insider Monkey.
