Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Regenxbio Inc (NASDAQ:RGNX) based on that data.
Hedge fund interest in Regenxbio Inc (NASDAQ:RGNX) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Veracyte Inc (NASDAQ:VCYT), Cinemark Holdings, Inc. (NYSE:CNK), and BMC Stock Holdings, Inc. (NASDAQ:BMCH) to gather more data points. Our calculations also showed that RGNX isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Aaron Cowen of Suvretta Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a glance at the key hedge fund action encompassing Regenxbio Inc (NASDAQ:RGNX).
Hedge fund activity in Regenxbio Inc (NASDAQ:RGNX)
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in RGNX a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jeremy Green’s Redmile Group has the largest position in Regenxbio Inc (NASDAQ:RGNX), worth close to $75.7 million, accounting for 2.1% of its total 13F portfolio. The second most bullish fund manager is Gilchrist Berg of Water Street Capital, with a $20.6 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Joseph Edelman’s Perceptive Advisors, Lawrence Kam’s Sonic Capital and Lei Zhang’s Hillhouse Capital Management. In terms of the portfolio weights assigned to each position Sonic Capital allocated the biggest weight to Regenxbio Inc (NASDAQ:RGNX), around 13.06% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, dishing out 3.48 percent of its 13F equity portfolio to RGNX.
Since Regenxbio Inc (NASDAQ:RGNX) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedge funds that elected to cut their full holdings in the first quarter. At the top of the heap, Israel Englander’s Millennium Management dumped the largest position of the “upper crust” of funds followed by Insider Monkey, valued at about $4.3 million in stock. Greg Martinez’s fund, Parkman Healthcare Partners, also said goodbye to its stock, about $3.5 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Regenxbio Inc (NASDAQ:RGNX) but similarly valued. These stocks are Veracyte Inc (NASDAQ:VCYT), Cinemark Holdings, Inc. (NYSE:CNK), BMC Stock Holdings, Inc. (NASDAQ:BMCH), and Magellan Health Inc (NASDAQ:MGLN). This group of stocks’ market valuations resemble RGNX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VCYT | 12 | 58406 | -2 |
| CNK | 27 | 190636 | 5 |
| BMCH | 23 | 210249 | -6 |
| MGLN | 15 | 234535 | -4 |
| Average | 19.25 | 173457 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $186 million in RGNX’s case. Cinemark Holdings, Inc. (NYSE:CNK) is the most popular stock in this table. On the other hand Veracyte Inc (NASDAQ:VCYT) is the least popular one with only 12 bullish hedge fund positions. Regenxbio Inc (NASDAQ:RGNX) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and surpassed the market by 15.9 percentage points. Unfortunately RGNX wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); RGNX investors were disappointed as the stock returned 16.3% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
