U.S. Markets close in 3 hrs 49 mins

Is Amneal Pharmaceuticals, Inc. (AMRX) Going To Burn These Hedge Funds ?

Nina Todic

Does Amneal Pharmaceuticals, Inc. (NYSE:AMRX) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.

Is Amneal Pharmaceuticals, Inc. (NYSE:AMRX) a first-rate investment right now? The smart money is becoming more confident. The number of long hedge fund positions moved up by 2 in recent months. Our calculations also showed that AMRX isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

In the financial world there are dozens of gauges stock traders have at their disposal to assess their stock investments. A pair of the most under-the-radar gauges are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the best investment managers can outpace the S&P 500 by a superb margin (see the details here).

SAC CAPITAL ADVISORS

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a peek at the recent hedge fund action encompassing Amneal Pharmaceuticals, Inc. (NYSE:AMRX).

What have hedge funds been doing with Amneal Pharmaceuticals, Inc. (NYSE:AMRX)?

At Q2's end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in AMRX a year ago. With hedge funds' capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

No of Hedge Funds with AMRX Positions

Of the funds tracked by Insider Monkey, Point72 Asset Management, managed by Steve Cohen, holds the most valuable position in Amneal Pharmaceuticals, Inc. (NYSE:AMRX). Point72 Asset Management has a $23.8 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $4.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism consist of Ken Griffin's Citadel Investment Group, Anand Parekh's Alyeska Investment Group and D. E. Shaw's D E Shaw.

As aggregate interest increased, specific money managers were leading the bulls' herd. Point72 Asset Management, managed by Steve Cohen, established the largest position in Amneal Pharmaceuticals, Inc. (NYSE:AMRX). Point72 Asset Management had $23.8 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $4.1 million investment in the stock during the quarter. The following funds were also among the new AMRX investors: Ken Griffin's Citadel Investment Group, Marc Majzner's Clearline Capital, and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.

Let's now take a look at hedge fund activity in other stocks similar to Amneal Pharmaceuticals, Inc. (NYSE:AMRX). We will take a look at GreenSky, Inc. (NASDAQ:GSKY), Cal-Maine Foods Inc (NASDAQ:CALM), Euronav NV (NYSE:EURN), and Myriad Genetics, Inc. (NASDAQ:MYGN). This group of stocks' market values resemble AMRX's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GSKY,20,89452,5 CALM,16,182069,0 EURN,16,153669,5 MYGN,15,214253,-2 Average,16.75,159861,2 [/table]

View table here if you experience formatting issues.

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 $160 million. That figure was $37 million in AMRX's case. GreenSky, Inc. (NASDAQ:GSKY) is the most popular stock in this table. On the other hand Myriad Genetics, Inc. (NASDAQ:MYGN) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Amneal Pharmaceuticals, Inc. (NYSE:AMRX) is even less popular than MYGN. Hedge funds dodged a bullet by taking a bearish stance towards AMRX. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately AMRX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); AMRX investors were disappointed as the stock returned -59.6% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

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

Related Content