Were Hedge Funds Right About Amicus Therapeutics, Inc. (FOLD)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Amicus Therapeutics, Inc. (NASDAQ:FOLD) and determine whether the smart money was really smart about this stock.

Amicus Therapeutics, Inc. (NASDAQ:FOLD) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. FOLD investors should be aware of a decrease in activity from the world’s largest hedge funds recently. There were 34 hedge funds in our database with FOLD positions at the end of the second quarter. Our calculations also showed that FOLD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s view the new hedge fund action encompassing Amicus Therapeutics, Inc. (NASDAQ:FOLD).

Joel Greenblatt of Gotham Asset Management

Do Hedge Funds Think FOLD Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FOLD over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Joseph Edelman’s Perceptive Advisors has the largest position in Amicus Therapeutics, Inc. (NASDAQ:FOLD), worth close to $253.6 million, accounting for 3.7% of its total 13F portfolio. Coming in second is Jeremy Green of Redmile Group, with a $198.6 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Remaining peers that are bullish encompass Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor), Joon Yun and Patrick Lee’s Palo Alto Investors and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Palo Alto Investors allocated the biggest weight to Amicus Therapeutics, Inc. (NASDAQ:FOLD), around 5.83% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, setting aside 3.68 percent of its 13F equity portfolio to FOLD.

Judging by the fact that Amicus Therapeutics, Inc. (NASDAQ:FOLD) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of fund managers who were dropping their full holdings by the end of the third quarter. Interestingly, Steve Cohen’s Point72 Asset Management dumped the largest stake of the 750 funds tracked by Insider Monkey, comprising about $37.3 million in stock. James E. Flynn’s fund, Deerfield Management, also sold off its stock, about $28.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Amicus Therapeutics, Inc. (NASDAQ:FOLD) but similarly valued. We will take a look at Health Catalyst, Inc (NASDAQ:HCAT), ModivCare Inc. (NASDAQ:MODV), Stepan Company (NYSE:SCL), Plexus Corp. (NASDAQ:PLXS), SmartRent, Inc. (NYSE:SMRT), Renewable Energy Group Inc (NASDAQ:REGI), and Primo Water Corporation (NYSE:PRMW). This group of stocks’ market values are closest to FOLD’s market value.

View table here if you experience formatting issues.

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 $245 million. That figure was $834 million in FOLD’s case. Primo Water Corporation (NYSE:PRMW) is the most popular stock in this table. On the other hand Stepan Company (NYSE:SCL) is the least popular one with only 9 bullish hedge fund positions. Amicus Therapeutics, Inc. (NASDAQ:FOLD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FOLD is 76.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, FOLD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FOLD were disappointed as the stock returned -1.5% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.