Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Repligen Corporation (NASDAQ:RGEN).
Repligen Corporation (NASDAQ:RGEN) has experienced an increase in activity from the world’s largest hedge funds of late. RGEN was in 12 hedge funds’ portfolios at the end of the third quarter of 2018. There were 9 hedge funds in our database with RGEN positions at the end of the previous quarter. Our calculations also showed that rgen isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s go over the recent hedge fund action encompassing Repligen Corporation (NASDAQ:RGEN).
How have hedgies been trading Repligen Corporation (NASDAQ:RGEN)?
Heading into the fourth quarter of 2018, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RGEN over the last 13 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Point72 Asset Management held the most valuable stake in Repligen Corporation (NASDAQ:RGEN), which was worth $17.7 million at the end of the third quarter. On the second spot was Miura Global Management which amassed $15.3 million worth of shares. Moreover, Laurion Capital Management, AQR Capital Management, and PEAK6 Capital Management were also bullish on Repligen Corporation (NASDAQ:RGEN), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, key money managers have jumped into Repligen Corporation (NASDAQ:RGEN) headfirst. Point72 Asset Management, managed by Steve Cohen, created the largest position in Repligen Corporation (NASDAQ:RGEN). Point72 Asset Management had $17.7 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $4.9 million investment in the stock during the quarter. The other funds with brand new RGEN positions are D. E. Shaw’s D E Shaw, Jeremy Green’s Redmile Group, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s check out hedge fund activity in other stocks similar to Repligen Corporation (NASDAQ:RGEN). We will take a look at WesBanco, Inc. (NASDAQ:WSBC), Reata Pharmaceuticals, Inc. (NASDAQ:RETA), Noah Holdings Limited (NYSE:NOAH), and TerraForm Power Inc (NASDAQ:TERP). This group of stocks’ market values are closest to RGEN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WSBC | 9 | 57867 | 2 |
| RETA | 17 | 242047 | 8 |
| NOAH | 8 | 95172 | -4 |
| TERP | 14 | 219193 | 0 |
| Average | 12 | 153570 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $52 million in RGEN’s case. Reata Pharmaceuticals, Inc. (NASDAQ:RETA) is the most popular stock in this table. On the other hand Noah Holdings Limited (NYSE:NOAH) is the least popular one with only 8 bullish hedge fund positions. Repligen Corporation (NASDAQ:RGEN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RETA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
