How do we determine whether Concordia Healthcare Corp (NASDAQ:CXRX) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Concordia Healthcare Corp (NASDAQ:CXRX) has seen an increase in activity from the world’s largest hedge funds lately. CXRX was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. There were 13 hedge funds in our database with CXRX holdings at the end of the previous quarter. At the end of this article we will also compare CXRX to other stocks including Fidelity & Guaranty Life (NYSE:FGL), Alder Biopharmaceuticals Inc (NASDAQ:ALDR), and AMN Healthcare Services, Inc. (NYSE:AHS) to get a better sense of its popularity.
In the 21st century investor’s toolkit there are a lot of formulas stock market investors can use to assess publicly traded companies. A pair of the most useful formulas are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top money managers can outclass the market by a very impressive margin (see the details here).
With all of this in mind, we’re going to take a gander at the latest action surrounding Concordia Healthcare Corp (NASDAQ:CXRX).
What does the smart money think about Concordia Healthcare Corp (NASDAQ:CXRX)?
Heading into Q4, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a 31% jump from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or had already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Hitchwood Capital Management, managed by James Crichton, holds the most valuable position in Concordia Healthcare Corp (NASDAQ:CXRX). Hitchwood Capital Management has an $82.7 million position in the stock, comprising 2.9% of its 13F portfolio. Coming in second is Miura Global Management, led by Pasco Alfaro and Richard Tumure, holding a $58 million position; 3.2% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism consist of Glenn Russell Dubin’s Highbridge Capital Management, Steve Cohen’s Point72 Asset Management, and Mark N. Diker’s Diker Management.
As aggregate interest increased, key money managers were leading the bulls’ herd. Miura Global Management established the biggest position in Concordia Healthcare Corp (NASDAQ:CXRX). Highbridge Capital Management also made a $40.2 million investment in the stock during the quarter. The other funds with brand new CXRX positions are Point72 Asset Management, Israel Englander’s Millennium Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Concordia Healthcare Corp (NASDAQ:CXRX) but similarly valued. These stocks are Fidelity & Guaranty Life (NYSE:FGL), Alder Biopharmaceuticals Inc (NASDAQ:ALDR), AMN Healthcare Services, Inc. (NYSE:AHS), and Vishay Intertechnology (NYSE:VSH). This group of stocks’ market caps resemble CXRX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FGL | 11 | 62732 | -3 |
| ALDR | 23 | 241585 | 5 |
| AHS | 23 | 126725 | -2 |
| VSH | 19 | 253848 | -2 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $171 million. That figure was $227 million in CXRX’s case. Alder Biopharmaceuticals Inc (NASDAQ:ALDR) is the most popular stock in this table. On the other hand Fidelity & Guaranty Life (NYSE:FGL) is the least popular one with only 11 bullish hedge fund positions. Concordia Healthcare Corp (NASDAQ:CXRX) is not the least popular stock in this group but hedge fund interest is still below average, although the amount of capital invested in the stock is above-average. Nonetheless, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ALDR might be a better candidate to consider a long position in at the moment.
