Is Endo International plc (ENDP) Going To Burn These Hedge Funds ?
Is Endo International plc (NASDAQ:ENDP) a good bet right now? We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Endo International plc (NASDAQ:ENDP) going to take off soon? The best stock pickers are in a bullish mood. The number of bullish hedge fund positions rose by 2 in recent months. Our calculations also showed that ENDP isn't among the 30 most popular stocks among hedge funds (see the video below). ENDP was in 21 hedge funds' portfolios at the end of the second quarter of 2019. There were 19 hedge funds in our database with ENDP positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are plenty of indicators shareholders can use to size up publicly traded companies. A duo of the most useful indicators are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can outpace the broader indices by a significant margin (see the details here).
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. Let's take a look at the recent hedge fund action regarding Endo International plc (NASDAQ:ENDP).
How are hedge funds trading Endo International plc (NASDAQ:ENDP)?
At Q2's end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in ENDP over the last 16 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Miller Value Partners held the most valuable stake in Endo International plc (NASDAQ:ENDP), which was worth $100.8 million at the end of the second quarter. On the second spot was Glenview Capital which amassed $56.9 million worth of shares. Moreover, Renaissance Technologies, Miller Value Partners, and Paulson & Co were also bullish on Endo International plc (NASDAQ:ENDP), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names were leading the bulls' herd. Miller Value Partners, managed by Bill Miller, assembled the most outsized call position in Endo International plc (NASDAQ:ENDP). Miller Value Partners had $100.8 million invested in the company at the end of the quarter. Bill Miller's Miller Value Partners also initiated a $40.4 million position during the quarter. The other funds with brand new ENDP positions are Ray Dalio's Bridgewater Associates, Israel Englander's Millennium Management, and Dmitry Balyasny's Balyasny Asset Management.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Endo International plc (NASDAQ:ENDP) but similarly valued. These stocks are Kadant Inc. (NYSE:KAI), ANI Pharmaceuticals Inc (NASDAQ:ANIP), The Marcus Corporation (NYSE:MCS), and Dicerna Pharmaceuticals Inc (NASDAQ:DRNA). This group of stocks' market values resemble ENDP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KAI,11,66354,-6 ANIP,12,98908,-5 MCS,14,63696,-2 DRNA,16,289627,-3 Average,13.25,129646,-4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $130 million. That figure was $253 million in ENDP's case. Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) is the most popular stock in this table. On the other hand Kadant Inc. (NYSE:KAI) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Endo International plc (NASDAQ:ENDP) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately ENDP wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ENDP were disappointed as the stock returned -22.1% 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 in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
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