How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly-traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Uniqure NV (NASDAQ:QURE).
Uniqure NV (NASDAQ:QURE) investors should pay attention to a decrease in hedge fund interest recently. QURE was included in 15 hedge funds’ portfolios at the end of the third quarter of 2015, versus 17 hedge funds holding shares of the company a quarter earlier. 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 Nextera Energy Partners LP (NYSE:NEP), Bridge Bancorp, Inc. (NASDAQ:BDGE), and Triple-S Management Corp.(NYSE:GTS) to gather more data points.
To most traders, hedge funds are perceived as unimportant, outdated investment tools of yesteryear. While there are over 8000 funds trading today, our experts choose to focus on the moguls of this club, about 700 funds. It is estimated that this group of investors administers most of the smart money’s total capital, and by tailing their first-class investments, Insider Monkey has determined various investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, let’s go over the latest action encompassing Uniqure NV (NASDAQ:QURE).
What have hedge funds been doing with Uniqure NV (NASDAQ:QURE)?
At the end of September, a total of 15 of the hedge funds tracked by Insider Monkey were bullish in this stock, down by a quarterly 12%. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, holds the most valuable position in Uniqure NV (NASDAQ:QURE). Sectoral Asset Management has a $15.6 million stake in the company, comprising 0.7% of its 13F portfolio. The second largest stake is held by Perceptive Advisors, managed by Joseph Edelman, which held a $14.1 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism comprise Steve Cohen’s Point72 Asset Management, Israel Englander’s Millennium Management and Dmitry Balyasny’s Balyasny Asset Management.
Judging by the fact that Uniqure NV (NASDAQ:QURE) has faced a declination in interest from the smart money, we can see that there exists a select few funds who were dropping their entire stakes at the end of the third quarter. Intriguingly, Jason Karp’s Tourbillon Capital Partners dumped the biggest stake of the 700 funds tracked by Insider Monkey, comprising about $14.6 million in stock. Michael Hintze’s fund, CQS Cayman LP, also dumped its stock, about $0.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by two funds during the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Uniqure NV (NASDAQ:QURE) but similarly valued. We will take a look at Nextera Energy Partners LP (NYSE:NEP), Bridge Bancorp, Inc. (NASDAQ:BDGE), Triple-S Management Corp.(NYSE:GTS), and Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). This group of stocks’ market valuations match QURE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NEP | 16 | 102687 | 1 |
| BDGE | 8 | 70426 | 1 |
| GTS | 21 | 76668 | 6 |
| ARNA | 12 | 36184 | -1 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $71 million, as compared to the $64 million that hedge funds held invested in QURE at the end of September. Uniqure NV (NASDAQ:QURE) registers a level of interest from hedge funds above average, although it is not the most popular stock in the list. Therefore, even though a more detailed analysis might suggest that Uniqure is a good investment at the moment, we think that it may be better to look into stocks that enjoy more attention from hedge funds, such as GTS or NEP (in this case).
