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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million 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 March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Galapagos NV (NASDAQ:GLPG) based on those filings.
Galapagos NV (NASDAQ:GLPG) has seen an increase in hedge fund interest lately. Galapagos NV (NASDAQ:GLPG) was in 20 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 22. There were 12 hedge funds in our database with GLPG positions at the end of the fourth quarter. Our calculations also showed that GLPG isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Steven Cohen of Point72 Asset Management
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Do Hedge Funds Think GLPG Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in GLPG a year ago. 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 Galapagos NV (NASDAQ:GLPG) was held by Point72 Asset Management, which reported holding $35.9 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $22.5 million position. Other investors bullish on the company included OrbiMed Advisors, Millennium Management, and Ikarian Capital. In terms of the portfolio weights assigned to each position Prosight Capital allocated the biggest weight to Galapagos NV (NASDAQ:GLPG), around 4.19% of its 13F portfolio. Aquilo Capital Management is also relatively very bullish on the stock, designating 1.63 percent of its 13F equity portfolio to GLPG.
As industrywide interest jumped, some big names have been driving this bullishness. OrbiMed Advisors, initiated the biggest position in Galapagos NV (NASDAQ:GLPG). OrbiMed Advisors had $17.8 million invested in the company at the end of the quarter. Neil Shahrestani's Ikarian Capital also initiated a $15.5 million position during the quarter. The other funds with new positions in the stock are Neil Shahrestani's Ikarian Capital, Lawrence Hawkins's Prosight Capital, and Sander Gerber's Hudson Bay Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Galapagos NV (NASDAQ:GLPG) but similarly valued. We will take a look at Avis Budget Group Inc. (NASDAQ:CAR), ASGN Incorporated (NYSE:ASGN), Flowserve Corporation (NYSE:FLS), Cyberark Software Ltd (NASDAQ:CYBR), Valmont Industries, Inc. (NYSE:VMI), Exponent, Inc. (NASDAQ:EXPO), and IDACORP Inc (NYSE:IDA). This group of stocks' market values are closest to GLPG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CAR,21,1724243,-7 ASGN,20,78754,6 FLS,29,174239,8 CYBR,32,502899,5 VMI,23,401266,-3 EXPO,17,63144,2 IDA,17,174429,3 Average,22.7,445568,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.7 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $168 million in GLPG's case. Cyberark Software Ltd (NASDAQ:CYBR) is the most popular stock in this table. On the other hand Exponent, Inc. (NASDAQ:EXPO) is the least popular one with only 17 bullish hedge fund positions. Galapagos NV (NASDAQ:GLPG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GLPG is 47.3. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately GLPG wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GLPG investors were disappointed as the stock returned -22.1% since the end of March (through 7/16) 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.