The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Enanta Pharmaceuticals Inc (NASDAQ:ENTA) based on those filings.
Is Enanta Pharmaceuticals Inc (NASDAQ:ENTA) going to take off soon? Prominent investors are selling. The number of bullish hedge fund bets retreated by 4 in recent months. Our calculations also showed that ENTA isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are a lot of gauges stock traders can use to grade stocks. Two 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 top fund managers can outclass the S&P 500 by a healthy amount (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a gander at the fresh hedge fund action regarding Enanta Pharmaceuticals Inc (NASDAQ:ENTA).
Hedge fund activity in Enanta Pharmaceuticals Inc (NASDAQ:ENTA)
At Q3's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in ENTA over the last 17 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Farallon Capital was the largest shareholder of Enanta Pharmaceuticals Inc (NASDAQ:ENTA), with a stake worth $76.6 million reported as of the end of September. Trailing Farallon Capital was Renaissance Technologies, which amassed a stake valued at $39.8 million. Armistice Capital, GLG Partners, and Marshall Wace 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 Armistice Capital allocated the biggest weight to Enanta Pharmaceuticals Inc (NASDAQ:ENTA), around 2.31% of its 13F portfolio. Farallon Capital is also relatively very bullish on the stock, earmarking 0.78 percent of its 13F equity portfolio to ENTA.
Judging by the fact that Enanta Pharmaceuticals Inc (NASDAQ:ENTA) has witnessed declining sentiment from the entirety of the hedge funds we track, it's easy to see that there is a sect of fund managers that elected to cut their full holdings in the third quarter. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management cut the biggest stake of all the hedgies monitored by Insider Monkey, comprising an estimated $0.9 million in stock. Warren Lammert's fund, Granite Point Capital, also dumped its stock, about $0.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Enanta Pharmaceuticals Inc (NASDAQ:ENTA) but similarly valued. These stocks are Kearny Financial Corp. (NASDAQ:KRNY), Encore Wire Corporation (NASDAQ:WIRE), Tronox Limited (NYSE:TROX), and Milacron Holdings Corp (NYSE:MCRN). All of these stocks' market caps match ENTA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KRNY,16,132793,3 WIRE,16,45331,1 TROX,18,115194,-2 MCRN,18,195679,5 Average,17,122249,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $122 million. That figure was $201 million in ENTA's case. Tronox Limited (NYSE:TROX) is the most popular stock in this table. On the other hand Kearny Financial Corp. (NASDAQ:KRNY) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Enanta Pharmaceuticals Inc (NASDAQ:ENTA) is even less popular than KRNY. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on ENTA, though not to the same extent, as the stock returned 6% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.