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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of June 30th, 2021. What do these smart investors think about Halozyme Therapeutics, Inc. (NASDAQ:HALO)?
Halozyme Therapeutics, Inc. (NASDAQ:HALO) investors should be aware of a decrease in enthusiasm from smart money recently. Halozyme Therapeutics, Inc. (NASDAQ:HALO) was in 20 hedge funds' portfolios at the end of June. The all time high for this statistic is 26. Our calculations also showed that HALO isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Arthur B Cohen and Joseph Healey of Healthcor Management LP
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let's analyze the new hedge fund action encompassing Halozyme Therapeutics, Inc. (NASDAQ:HALO).
Do Hedge Funds Think HALO Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HALO over the last 24 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Halozyme Therapeutics, Inc. (NASDAQ:HALO) was held by Fisher Asset Management, which reported holding $41.9 million worth of stock at the end of June. It was followed by Healthcor Management LP with a $29.5 million position. Other investors bullish on the company included Driehaus Capital, Two Sigma Advisors, and D E Shaw. In terms of the portfolio weights assigned to each position SilverArc Capital allocated the biggest weight to Halozyme Therapeutics, Inc. (NASDAQ:HALO), around 1.35% of its 13F portfolio. Healthcor Management LP is also relatively very bullish on the stock, dishing out 1.18 percent of its 13F equity portfolio to HALO.
Since Halozyme Therapeutics, Inc. (NASDAQ:HALO) has experienced declining sentiment from the smart money, we can see that there lies a certain "tier" of hedgies that slashed their positions entirely last quarter. It's worth mentioning that Renaissance Technologies sold off the biggest position of the 750 funds watched by Insider Monkey, comprising about $28.1 million in stock, and George McCabe's Portolan Capital Management was right behind this move, as the fund dropped about $6.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 3 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to Halozyme Therapeutics, Inc. (NASDAQ:HALO). These stocks are Stitch Fix, Inc. (NASDAQ:SFIX), BlackLine, Inc. (NASDAQ:BL), American Campus Communities, Inc. (NYSE:ACC), Ultragenyx Pharmaceutical Inc (NASDAQ:RARE), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Affiliated Managers Group, Inc. (NYSE:AMG), and DCP Midstream LP (NYSE:DCP). This group of stocks' market valuations resemble HALO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SFIX,35,702790,7 BL,20,266005,-4 ACC,21,222547,-5 RARE,32,770180,7 WSC,52,1399877,5 AMG,30,784733,4 DCP,3,31363,-1 Average,27.6,596785,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $597 million. That figure was $195 million in HALO's case. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is the most popular stock in this table. On the other hand DCP Midstream LP (NYSE:DCP) is the least popular one with only 3 bullish hedge fund positions. Halozyme Therapeutics, Inc. (NASDAQ:HALO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HALO is 42.4. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately HALO wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); HALO investors were disappointed as the stock returned -14.4% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.