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We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of BeiGene, Ltd. (NASDAQ:BGNE) based on that data.
Is BGNE a good stock to buy now? Hedge fund interest in BeiGene, Ltd. (NASDAQ:BGNE) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BGNE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare BGNE to other stocks including Liberty Broadband Corp (NASDAQ:LBRDA), Align Technology, Inc. (NASDAQ:ALGN), and TransDigm Group Incorporated (NYSE:TDG) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a large number of metrics shareholders put to use to size up publicly traded companies. Two of the most underrated metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce their index-focused peers by a healthy amount (see the details here).
Felix Baker of Baker Bros.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 go over the key hedge fund action regarding BeiGene, Ltd. (NASDAQ:BGNE).
Do Hedge Funds Think BGNE Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in BGNE a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, Baker Bros. Advisors was the largest shareholder of BeiGene, Ltd. (NASDAQ:BGNE), with a stake worth $3810.1 million reported as of the end of September. Trailing Baker Bros. Advisors was Hillhouse Capital Management, which amassed a stake valued at $1567.5 million. Rock Springs Capital Management, Driehaus Capital, and Casdin Capital 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 Baker Bros. Advisors allocated the biggest weight to BeiGene, Ltd. (NASDAQ:BGNE), around 15.22% of its 13F portfolio. Hillhouse Capital Management is also relatively very bullish on the stock, dishing out 11.87 percent of its 13F equity portfolio to BGNE.
Because BeiGene, Ltd. (NASDAQ:BGNE) has experienced a decline in interest from the smart money, logic holds that there lies a certain "tier" of fund managers that slashed their entire stakes heading into Q4. Intriguingly, Charles Clough's Clough Capital Partners cut the biggest position of all the hedgies followed by Insider Monkey, comprising about $1.9 million in stock. Ryan Tolkin (CIO)'s fund, Schonfeld Strategic Advisors, also dropped its stock, about $1.2 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to BeiGene, Ltd. (NASDAQ:BGNE). We will take a look at Liberty Broadband Corp (NASDAQ:LBRDA), Align Technology, Inc. (NASDAQ:ALGN), TransDigm Group Incorporated (NYSE:TDG), Fortive Corporation (NYSE:FTV), Rockwell Automation Inc. (NYSE:ROK), Repros Therapeutics Inc (NASDAQ:RPRX), and Lennar Corporation (NYSE:LEN). This group of stocks' market valuations resemble BGNE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LBRDA,25,862989,3 ALGN,47,2164625,6 TDG,64,6121503,2 FTV,34,1619893,-1 ROK,44,521128,-6 RPRX,20,2901046,-4 LEN,60,1740218,5 Average,42,2275915,0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 42 hedge funds with bullish positions and the average amount invested in these stocks was $2276 million. That figure was $5585 million in BGNE's case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand Repros Therapeutics Inc (NASDAQ:RPRX) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks BeiGene, Ltd. (NASDAQ:BGNE) is even less popular than RPRX. Our overall hedge fund sentiment score for BGNE is 22. 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. Hedge funds dodged a bullet by taking a bearish stance towards BGNE. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th but managed to beat the market again by 16.2 percentage points. Unfortunately BGNE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BGNE investors were disappointed as the stock returned -20.4% since the end of the third quarter (through 12/8) 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 most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.