Is RIGL A Good Stock To Buy Now According To Hedge Funds?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks aren’t doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) changed recently.

Is RIGL a good stock to buy now? Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) investors should be aware of an increase in hedge fund interest lately. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) was in 20 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 18 hedge funds in our database with RIGL holdings at the end of June. Our calculations also showed that RIGL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most market participants, hedge funds are viewed as unimportant, old investment tools of the past. While there are over 8000 funds with their doors open today, Our researchers hone in on the top tier of this group, around 850 funds. These money managers manage the lion’s share of all hedge funds’ total asset base, and by keeping track of their top picks, Insider Monkey has discovered various investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Kris Jenner of Rock Springs Capital Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Now we’re going to review the new hedge fund action encompassing Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL).

Do Hedge Funds Think RIGL Is A Good Stock To Buy Now?

At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the second quarter of 2020. By comparison, 16 hedge funds held shares or bullish call options in RIGL a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Tamarack Capital Management, managed by Justin John Ferayorni, holds the most valuable position in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). Tamarack Capital Management has a $18 million position in the stock, comprising 5.5% of its 13F portfolio. The second most bullish fund manager is Ken Griffin of Citadel Investment Group, with a $15 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism comprise Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management, Renaissance Technologies and Sander Gerber’s Hudson Bay Capital Management. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), around 5.55% of its 13F portfolio. AWH Capital is also relatively very bullish on the stock, designating 0.39 percent of its 13F equity portfolio to RIGL.

As aggregate interest increased, some big names have jumped into Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) headfirst. Redmile Group, managed by Jeremy Green, created the most outsized position in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). Redmile Group had $1.8 million invested in the company at the end of the quarter. Austin Wiggins Hopper’s AWH Capital also made a $0.3 million investment in the stock during the quarter. The other funds with brand new RIGL positions are Cliff Asness’s AQR Capital Management, Donald Sussman’s Paloma Partners, and Daniel S. Och’s OZ Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) but similarly valued. We will take a look at Organogenesis Holdings Inc. (NASDAQ:ORGO), Rubius Therapeutics, Inc. (NASDAQ:RUBY), Syros Pharmaceuticals, Inc. (NASDAQ:SYRS), Brightcove Inc (NASDAQ:BCOV), The Lovesac Company (NASDAQ:LOVE), AnaptysBio, Inc. (NASDAQ:ANAB), and Allied Motion Technologies, Inc. (NASDAQ:AMOT). This group of stocks’ market valuations are similar to RIGL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $80 million in RIGL’s case. AnaptysBio, Inc. (NASDAQ:ANAB) is the most popular stock in this table. On the other hand Organogenesis Holdings Inc. (NASDAQ:ORGO) is the least popular one with only 2 bullish hedge fund positions. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RIGL is 77.9. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on RIGL as the stock returned 36.3% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.