We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Theravance Inc (NASDAQ:THRX).
Is Theravance Inc (NASDAQ:THRX) a bargain? Investors who are in the know are becoming hopeful. The number of bullish hedge fund bets advanced by 9 in recent months. At the end of this article we will also compare THRX to other stocks including Veeco Instruments Inc. (NASDAQ:VECO), BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), and Lifelock Inc (NYSE:LOCK) to get a better sense of its popularity.
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With all of this in mind, let’s analyze the new action surrounding Theravance Inc (NASDAQ:THRX).
How have hedgies been trading Theravance Inc (NASDAQ:THRX)?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 82% from the second quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Seth Klarman’s Baupost Group has the number one position in Theravance Inc (NASDAQ:THRX), worth close to $142.3 million, amounting to 2.4% of its total 13F portfolio. Coming in second is Iridian Asset Management, led by David Cohen and Harold Levy, holding a $89.8 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining peers that hold long positions consist of Michael A. Price and Amos Meron’s Empyrean Capital Partners, Jamie Zimmerman’s Litespeed Management and Richard Perry’s Perry Capital.
Now, specific money managers have been driving this bullishness. Armistice Capital, managed by Steven Boyd, assembled the largest position in Theravance Inc (NASDAQ:THRX). Armistice Capital had $14.7 million invested in the company at the end of the quarter. Marc Majzner’s Clearline Capital also made a $8.2 million investment in the stock during the quarter. The other funds with brand new THRX positions are Steve Cohen’s Point72 Asset Management, Ken Griffin’s Citadel Investment Group, and Peter Muller’s PDT Partners.
Let’s go over hedge fund activity in other stocks similar to Theravance Inc (NASDAQ:THRX). These stocks are Veeco Instruments Inc. (NASDAQ:VECO), BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), Lifelock Inc (NYSE:LOCK), and ImmunoGen, Inc. (NASDAQ:IMGN). This group of stocks’ market caps are closest to THRX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VECO | 14 | 146405 | -3 |
| BCRX | 14 | 263709 | -11 |
| LOCK | 25 | 193336 | 2 |
| IMGN | 14 | 99350 | 0 |
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $342 million in THRX’s case. Lifelock Inc (NYSE:LOCK) is the most popular stock in this table. On the other hand Veeco Instruments Inc. (NASDAQ:VECO) is the least popular one with only 14 bullish hedge fund positions. Theravance Inc (NASDAQ:THRX) is not the most popular stock in this group but hedge fund interest is still above average. That makes THRX worth a closer look.
