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Is BCRX Stock A Buy or Sell?

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Debasis Saha
·5 min read
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Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) changed recently.

Is BCRX stock a buy? Money managers were taking an optimistic view. The number of long hedge fund positions increased by 4 lately. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) was in 26 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BCRX isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In today’s marketplace there are plenty of indicators market participants have at their disposal to grade stocks. Some of the less utilized indicators are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the top fund managers can trounce their index-focused peers by a solid amount (see the details here).

Felix Baker - Baker Bros.
Felix Baker - Baker Bros.

Felix Baker of Baker Bros.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let's review the fresh hedge fund action regarding BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX).

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

At the end of the fourth quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in BCRX 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.

Is BCRX A Good Stock To Buy?
Is BCRX A Good Stock To Buy?

Among these funds, Baker Bros. Advisors held the most valuable stake in BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), which was worth $94.6 million at the end of the fourth quarter. On the second spot was Sarissa Capital Management which amassed $60.9 million worth of shares. Citadel Investment Group, Deerfield Management, and Point72 Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Burrage Capital Management allocated the biggest weight to BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), around 6.28% of its 13F portfolio. Sarissa Capital Management is also relatively very bullish on the stock, setting aside 6.22 percent of its 13F equity portfolio to BCRX.

As one would reasonably expect, key hedge funds have jumped into BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) headfirst. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the biggest position in BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX). Adage Capital Management had $11.9 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $9.5 million position during the quarter. The following funds were also among the new BCRX investors: Christiana Goh Bardon's Burrage Capital Management, Devesh Gandhi's SilverArc Capital, and D. E. Shaw's D E Shaw.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) but similarly valued. These stocks are Studio City International Holdings Limited (NYSE:MSC), Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM), GameStop Corp. (NYSE:GME), Eagle Bancorp, Inc. (NASDAQ:EGBN), Astec Industries, Inc. (NASDAQ:ASTE), Newmark Group, Inc. (NASDAQ:NMRK), and BioLife Solutions, Inc. (NASDAQ:BLFS). All of these stocks' market caps resemble BCRX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MSC,3,204227,0 RYTM,11,302010,1 GME,27,322827,-1 EGBN,10,20149,-3 ASTE,12,86606,-3 NMRK,22,139420,3 BLFS,14,414093,1 Average,14.1,212762,-0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.1 hedge funds with bullish positions and the average amount invested in these stocks was $213 million. That figure was $344 million in BCRX's case. GameStop Corp. (NYSE:GME) is the most popular stock in this table. On the other hand Studio City International Holdings Limited (NYSE:MSC) is the least popular one with only 3 bullish hedge fund positions. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BCRX is 86.9. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on BCRX as the stock returned 54.5% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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