Seth Klarman’s Baupost Group has initiated a new passive stake in Orexigen Therapeutics Inc. (NASDAQ:OREX), a new filing the U.S. Securities and Exchange Commission showed. Baupost Group holds 25.82 million shares of Orexigen, which represent 17.17% of the company’s outstanding stock. In another filing, Steve Cohen’s Point72 Asset Management disclosed holding 2.21 million shares of Spectranetics Corp (NASDAQ:SPNC), representing 5.2% of the outstanding stock. The passive stake represents an increase from 187,300 shares held by the investor at the end of June.
We pay attention to hedge funds’ moves, especially to Klarman’s and Cohen’s moves, because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% in 3 years, outperforming the S&P 500 Index by some 53 percentage points (see more details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
Baupost Group is one of the world’s largest hedge funds. At the end of the second quarter, the value of the fund’s equity portfolio stood at $5.99 billion and consisted mainly of Basic Materials, Technology, and Healthcare stocks. Top holdings in terms of value, were represented by Cheniere Energy Inc. (NYSEMKT:LNG), ViaSat Inc. (NASDAQ:VSAT), and Pioneer Natural Resources (NYSE:PXD).
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Orexigen Therapeutics Inc. (NASDAQ:OREX) is a biopharmaceutical company focused on the development of pharmaceutical product candidates for the treatment of obesity. It has a market cap of $298.44 million. Last month, Orexigen announced that Baupost Group-managed funds bought 20 million shares of its common stock and warrants to purchase 5 million shares in a private placement at $3 per share and 0.25 of a warrant, raising $60 million. For the three months ended June 30, Orexigen Therapeutics Inc. (NASDAQ:OREX) posted a loss of $22.5 million, or $0.18 per share, versus a loss of $24.5 million, or $0.21 per share, for the same quarter last year.
During the second quarter, the total number of hedge funds among those that we track holding Orexigen Therapeutics Inc. (NASDAQ:OREX) rose to 28 at the end of June from 24 at the end of the first quarter, while the aggregate value of their investments decreased to $145.85 million compared to $184.87 million held in shares at the end of the first quarter. Among the funds we track, the largest shareholder of Orexigen Therapeutics Inc. (NASDAQ:OREX) is Robert Pohly’s Samlyn Capital, which holds 6.05 million shares of the company as of June 30.
