Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Acorda Therapeutics Inc (NASDAQ:ACOR) a buy right now? Money managers are in an optimistic mood. The number of bullish hedge fund bets inched up by 1 in recent months. ACOR was in 17 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with ACOR holdings at the end of the previous quarter. 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 CYS Investments Inc (NYSE:CYS), Government Properties Income Trust (NYSE:GOV), and WestAmerica Bancorp. (NASDAQ:WABC) to gather more data points.
Follow Acorda Therapeutics Inc. (NASDAQ:ACOR)
Follow Acorda Therapeutics Inc. (NASDAQ:ACOR)
According to most stock holders, hedge funds are viewed as unimportant, outdated financial vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, Our researchers choose to focus on the aristocrats of this club, about 700 funds. Most estimates calculate that this group of people watch over the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their matchless picks, Insider Monkey has deciphered a few investment strategies that have historically outstripped the broader indices. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, let’s take a peek at the new action surrounding Acorda Therapeutics Inc (NASDAQ:ACOR).
What have hedge funds been doing with Acorda Therapeutics Inc (NASDAQ:ACOR)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, inching up by 6% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the biggest position in Acorda Therapeutics Inc (NASDAQ:ACOR). The fund reportedly holds a $47.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Baker Bros. Advisors, managed by Julian Baker and Felix Baker, which holds a $29.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions comprise Steve Cohen’s Point72 Asset Management, Christopher James’s Partner Fund Management and Israel Englander’s Millennium Management.
Consequently, specific money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, assembled the most valuable position in Acorda Therapeutics Inc (NASDAQ:ACOR), worth an estimated $28.7 million at the end of the quarter. Matt Sirovich and Jeremy Mindich’s Scopia Capital also initiated a $15 million position during the quarter. The other funds with new positions in the stock are Hal Mintz’s Sabby Capital, Ken Greenberg and David Kim’s Ghost Tree Capital, and Peter Muller’s PDT Partners.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Acorda Therapeutics Inc (NASDAQ:ACOR) but similarly valued. We will take a look at CYS Investments Inc (NYSE:CYS), Government Properties Income Trust (NYSE:GOV), WestAmerica Bancorp. (NASDAQ:WABC), and Viper Energy Partners LP (NASDAQ:VNOM). All of these stocks’ market caps match ACOR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CYS | 8 | 5038 | 0 |
| GOV | 6 | 59473 | 0 |
| WABC | 6 | 15600 | -3 |
| VNOM | 5 | 20812 | 0 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. CYS Investments Inc (NYSE:CYS) is the most popular stock in this table. On the other hand Viper Energy Partners LP (NASDAQ:VNOM) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Acorda Therapeutics Inc (NASDAQ:ACOR) is more popular among hedge funds and has also attracted investments far exceeding the average of this group: $203 million at the end of the third quarter. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
