Steve Cohen‘s Point72 Asset Management has loaded up on significant amounts of Renewable Energy Group Inc (NASDAQ:REGI) and NxStage Medical, Inc. (NASDAQ:NXTM) shares, according to two Schedule 13G forms filed with the Securities and Exchange Commission. The fund’s enhanced stake in Renewable Energy is now comprised of 2.25 million shares, up from 341,000 shares on March 31, while in NxStage Medical, Inc. (NASDAQ:NXTM) the family office’s holding spiked to 3.16 million shares from some 994,700 shares. Other affiliated entities through which the stakes were acquired include Point72 Capital Advisors, Inc., Cubist Systematic Strategies, LLC, and EverPoint Asset Management, LLC.
Most investors don’t have enough time to do in-depth analysis on each stock that they want to include in their portfolios. Professional investors, like Cohen, spend weeks conducting due diligence on each company and spend millions on obtaining information and paying the salaries of Ivy League educated analysts. That’s why we have always believed that imitating the stock picks of hedge funds and billionaires is an excellent short cut we can take. It doesn’t cost an arm and a leg either. We analyzed the historical stock picks of these investors and our research revealed that the small cap picks of hedge funds performed better than the market and their large-cap picks. A portfolio of 15 most popular small caps among several hedge funds outperformed the S&P 500 Total Return Index by 95 basis points per month between 1999 and 2012. The exceptional results of this strategy got even better in the forward tests we have been conducting since the end of August 2012. The most popular small-cap stocks among hedge funds beat the market by more than 79 percentage points since then (see the details here).
Born out of the revamping of the former S.A.C. Capital Advisors into a family office for Cohen and his employees, Point72 had an impressive first quarter. The fund gained some 7.5% during the first three months of the year, while the market value of Point72’s public equity portfolio stood at $14.67 billion at the end of the first quarter, with a majority of its holdings belonging to the energy and consumer discretionary sectors.
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Coming back to the fund’s new holding in Renewable Energy Group Inc (NASDAQ:REGI), which represents 5.1% of the company’s outstanding common stock, the $543.92 million company is a biodiesel producer operating in the United States with a nationwide distribution network. The stock gained more than 16% yesterday on the heels of a Piper Jaffray upgrade to ‘Outperform’ from ‘Neutral, with a price target of $15. The development has its grounds in the latest proposal from the US Environmental Protection Agency’s (EPA) for Renewable Fuel Standard (RFS) volumes. According to the amount of Renewable Volume Obligation (RVO), decided by the agency for three years, Renewable Energy Group Inc (NASDAQ:REGI)’s margins are expected to improve considerably owing to increased revenue from the sale of Renewable Identification Numbers (RIN).
Among over 700 hedge funds that we track, the interest in Renewable Energy Group Inc (NASDAQ:REGI) slightly decreased during the first quarter to 15 firms having invested about $49.39 million in the company as compared to 16 funds with $76.45 million a quarter earlier. Clint Carlson‘s Carlson Capital has the largest long position in Renewable Energy Group Inc (NASDAQ:REGI) with nearly 4.0 million shares valued at $36.88 million.
Point72’s holding in NxStage Medical, Inc. (NASDAQ:NXTM) comprises 5% of the $1.02 billion healthcare company’s outstanding common stock. Although up by more than 18% over the past year, NxStage Medical, Inc. (NASDAQ:NXTM)’s stock has slid by 10.6% so far this year, despite first quarter revenues exceeding guidance and delivering a 10% increase to $79.5 million on a year-over-year basis, while expected loss in earnings also came in better than anticipated. In contrast, the medical instruments & supplies sector has gained nearly 4.5% during the same time period. The innovative approaches that NxStage Medical, Inc. (NASDAQ:NXTM)’s management aims to derive future growth from include nocturnal therapy,and NxStage Kidney Care, enabling customers to transition to a home hemodialysis.
As far as the hedge fund interest in NxStage Medical, Inc. (NASDAQ:NXTM) is concerned, it increased slightly over the quarter to 21 firms with $173.54 million invested in the company, from 20 funds with $170.48 million in the previous quarter. James E. Flynn‘s Deerfield Management and Justin John Ferayorni‘s Tamarack Capital Management are the two largest stockholders of NxStage Medical, Inc. (NASDAQ:NXTM) in our database with respective stakes of 5.03 million shares and 1.30 million shares.
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