Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Regulus Therapeutics Inc (NASDAQ:RGLS) in this article.
Regulus Therapeutics Inc (NASDAQ:RGLS) has lost 48% since the beginning of 2015 and the stock was in 13 hedge funds’ portfolios at the end of the third quarter of 2015. Moreover, RGLS has seen a slight decrease in activity from the world’s largest hedge funds of late. At the end of this article we will also compare RGLS to other stocks, including First Defiance Financial (NASDAQ:FDEF), Versartic Inc (NASDAQ:VSAR), and Everi Holdings Inc (NYSE:EVRI) to get a better sense of its popularity.
Today there are several methods shareholders can use to size up stocks. Two of the most useful methods are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace their index-focused peers by a solid margin (see the details here).
Now, let’s take a look at the fresh action regarding Regulus Therapeutics Inc (NASDAQ:RGLS).
What have hedge funds been doing with Regulus Therapeutics Inc (NASDAQ:RGLS)?
At the Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 7% from the second quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Peter Kolchinsky’s RA Capital Management has the largest position in Regulus Therapeutics Inc (NASDAQ:RGLS), worth close to $26.4 million, corresponding to 3.8% of its total 13F portfolio. The second most bullish fund manager is Sabby Capital, led by Hal Mintz, holding a $7.9 million call position; 0.3% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish comprise Bihua Chen’s Cormorant Asset Management and Adam Usdan’s Trellus Management Company.
Due to the fact that Regulus Therapeutics Inc (NASDAQ:RGLS) has experienced a declining sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedgies that slashed their entire stakes last quarter. Intriguingly, Benjamin A. Smith’s Laurion Capital Management sold off the biggest stake of all the hedgies monitored by Insider Monkey, worth about $0.8 million in stock. Renaissance Technologies also said goodbye to its stock, about $0.6 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Regulus Therapeutics Inc (NASDAQ:RGLS) but similarly valued. These stocks are First Defiance Financial (NASDAQ:FDEF), Versartic Inc (NASDAQ:VSAR), Everi Holdings Inc (NYSE:EVRI), and American Vanguard Corp. (NYSE:AVD). All of these stocks’ market caps are similar to RGLS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FDEF | 10 | 22421 | 1 |
| VSAR | 12 | 110250 | 2 |
| EVRI | 16 | 98144 | -6 |
| AVD | 6 | 19176 | 0 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $46 million in RGLS’s case. Everi Holdings Inc (NYSE:EVRI) is the most popular stock in this table. On the other hand American Vanguard Corp. (NYSE:AVD) is the least popular one with only 6 bullish hedge fund positions. Regulus Therapeutics Inc (NASDAQ:RGLS) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EVRI might be a better candidate to consider a long position.
