After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Acorda Therapeutics Inc (NASDAQ:ACOR).
Acorda Therapeutics Inc (NASDAQ:ACOR) has experienced a decrease in support from the world's most elite money managers lately. ACOR was in 15 hedge funds' portfolios at the end of September. There were 16 hedge funds in our database with ACOR positions at the end of the previous quarter. Our calculations also showed that ACOR 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_364849" align="aligncenter" width="598"] Jeremy Mindich of Scopia Capital[/caption]
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 glance at the new hedge fund action encompassing Acorda Therapeutics Inc (NASDAQ:ACOR).
What have hedge funds been doing with Acorda Therapeutics Inc (NASDAQ:ACOR)?
At Q3's end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in ACOR over the last 17 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.
Among these funds, Renaissance Technologies held the most valuable stake in Acorda Therapeutics Inc (NASDAQ:ACOR), which was worth $11.6 million at the end of the third quarter. On the second spot was Scopia Capital which amassed $8 million worth of shares. Baker Bros. Advisors, Partner Fund Management, and Point72 Asset Management 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 Scopia Capital allocated the biggest weight to Acorda Therapeutics Inc (NASDAQ:ACOR), around 0.47% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, setting aside 0.19 percent of its 13F equity portfolio to ACOR.
Seeing as Acorda Therapeutics Inc (NASDAQ:ACOR) has experienced declining sentiment from the smart money, it's easy to see that there was a specific group of funds that elected to cut their full holdings by the end of the third quarter. It's worth mentioning that Joseph Edelman's Perceptive Advisors dumped the largest position of the "upper crust" of funds monitored by Insider Monkey, comprising close to $8.6 million in stock. Howard Marks's fund, Oaktree Capital Management, also said goodbye to its stock, about $6.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Acorda Therapeutics Inc (NASDAQ:ACOR) but similarly valued. These stocks are Red Violet, Inc. (NASDAQ:RDVT), Ultralife Corp. (NASDAQ:ULBI), Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP), and Armstrong Flooring, Inc. (NYSE:AFI). All of these stocks' market caps match ACOR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RDVT,2,2375,1 ULBI,3,3515,-1 USAP,6,26056,-2 AFI,13,39918,1 Average,6,17966,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $41 million in ACOR's case. Armstrong Flooring, Inc. (NYSE:AFI) is the most popular stock in this table. On the other hand Red Violet, Inc. (NASDAQ:RDVT) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Acorda Therapeutics Inc (NASDAQ:ACOR) is more popular among hedge funds. 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. Unfortunately ACOR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ACOR were disappointed as the stock returned -44.3% during the first two months of the fourth 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.