Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Blueprint Medicines Corporation (NASDAQ:BPMC) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Is Blueprint Medicines Corporation (NASDAQ:BPMC) ready to rally soon? Money managers were getting less bullish. The number of bullish hedge fund bets decreased by 2 lately. Blueprint Medicines Corporation (NASDAQ:BPMC) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that BPMC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 36 hedge funds in our database with BPMC positions at the end of the second quarter.
Kris Jenner of Rock Springs Capital Management
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. Keeping this in mind let’s take a look at the latest hedge fund action surrounding Blueprint Medicines Corporation (NASDAQ:BPMC).
Do Hedge Funds Think BPMC Is A Good Stock To Buy Now?
At third quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. By comparison, 34 hedge funds held shares or bullish call options in BPMC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Casdin Capital, managed by Eli Casdin, holds the biggest position in Blueprint Medicines Corporation (NASDAQ:BPMC). Casdin Capital has a $159.4 million position in the stock, comprising 4% of its 13F portfolio. The second most bullish fund manager is Alkeon Capital Management, led by Panayotis Takis Sparaggis, holding a $130.8 million position; 0.2% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism consist of Eric Bannasch’s Cadian Capital, Farallon Capital and Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management. In terms of the portfolio weights assigned to each position Aquilo Capital Management allocated the biggest weight to Blueprint Medicines Corporation (NASDAQ:BPMC), around 9.74% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, setting aside 5.64 percent of its 13F equity portfolio to BPMC.
Because Blueprint Medicines Corporation (NASDAQ:BPMC) has faced falling interest from the aggregate hedge fund industry, logic holds that there is a sect of funds that elected to cut their full holdings last quarter. Intriguingly, Lei Zhang’s Hillhouse Capital Management sold off the largest stake of the 750 funds monitored by Insider Monkey, valued at close to $55.9 million in stock. Renaissance Technologies, also cut its stock, about $13.4 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Blueprint Medicines Corporation (NASDAQ:BPMC). We will take a look at Grupo Aeroportuario del Pacifico (NYSE:PAC), Ardagh Metal Packaging S.A. (NYSE:AMBP), MDU Resources Group Inc (NYSE:MDU), MGM Growth Properties LLC (NYSE:MGP), Hanesbrands Inc. (NYSE:HBI), ASGN Incorporated (NYSE:ASGN), and New York Community Bancorp, Inc. (NYSE:NYCB). This group of stocks’ market caps match BPMC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PAC | 3 | 88302 | -4 |
| AMBP | 27 | 400201 | 27 |
| MDU | 20 | 141838 | -1 |
| MGP | 27 | 536809 | -2 |
| HBI | 34 | 501052 | 1 |
| ASGN | 11 | 43470 | -4 |
| NYCB | 27 | 482594 | -3 |
| Average | 21.3 | 313467 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $313 million. That figure was $911 million in BPMC’s case. Hanesbrands Inc. (NYSE:HBI) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Pacifico (NYSE:PAC) is the least popular one with only 3 bullish hedge fund positions. Blueprint Medicines Corporation (NASDAQ:BPMC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BPMC is 79.8. 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, BPMC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BPMC were disappointed as the stock returned -25% 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.
