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Hedge Funds Are Crazy About Rigel Pharmaceuticals, Inc. (RIGL)

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In this article we are going to use hedge fund sentiment as a tool and determine whether Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is a good investment 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 Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) the right pick for your portfolio? Prominent investors were buying. The number of long hedge fund positions increased by 3 recently. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) was in 22 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RIGL isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let's go over the latest hedge fund action regarding Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL).

Justin John Ferayorni - Tamarack Capital Management
Justin John Ferayorni - Tamarack Capital Management

Justin John Ferayorni of Tamarack Capital Management

Do Hedge Funds Think RIGL Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in RIGL over the last 25 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey's hedge fund database, Justin John Ferayorni's Tamarack Capital Management has the number one position in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), worth close to $25.4 million, amounting to 8% of its total 13F portfolio. On Tamarack Capital Management's heels is Rock Springs Capital Management, managed by Kris Jenner, Gordon Bussard, Graham McPhail, which holds a $17.4 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism encompass Israel Englander's Millennium Management, Sander Gerber's Hudson Bay Capital Management and Jeffrey Jay and David Kroin's Great Point Partners. In terms of the portfolio weights assigned to each position HealthInvest Partners AB allocated the biggest weight to Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), around 9.6% of its 13F portfolio. Tamarack Capital Management is also relatively very bullish on the stock, setting aside 8.02 percent of its 13F equity portfolio to RIGL.

As industrywide interest jumped, key hedge funds have jumped into Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) headfirst. HealthInvest Partners AB, managed by Anders Hallberg and Carl Bennet, assembled the largest position in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). HealthInvest Partners AB had $6.4 million invested in the company at the end of the quarter. Benjamin A. Smith's Laurion Capital Management also initiated a $4.1 million position during the quarter. The other funds with brand new RIGL positions are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, D. E. Shaw's D E Shaw, and Paul Marshall and Ian Wace's Marshall Wace LLP.

Let's now review hedge fund activity in other stocks similar to Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). These stocks are Bank of Marin Bancorp (NASDAQ:BMRC), El Pollo LoCo Holdings Inc (NASDAQ:LOCO), Antares Pharma Inc (NASDAQ:ATRS), Fossil Group Inc (NASDAQ:FOSL), Safe Bulkers, Inc. (NYSE:SB), Haverty Furniture Companies, Inc. (NYSE:HVT), and Vintage Wine Estates Inc. (NASDAQ:VWE). This group of stocks' market valuations match RIGL's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BMRC,6,10253,-4 LOCO,6,20669,-1 ATRS,19,54389,1 FOSL,17,106857,1 SB,14,62692,0 HVT,15,81482,-1 VWE,7,56628,7 Average,12,56139,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $111 million in RIGL's case. Antares Pharma Inc (NASDAQ:ATRS) is the most popular stock in this table. On the other hand Bank of Marin Bancorp (NASDAQ:BMRC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is more popular among hedge funds. Our overall hedge fund sentiment score for RIGL is 88. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately RIGL wasn't nearly as popular as these 5 stocks and hedge funds that were betting on RIGL were disappointed as the stock returned -27% since the end of the third quarter (through 12/31) 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 since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.