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The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Orphazyme A/S (NASDAQ:ORPH).
Is Orphazyme A/S (NASDAQ:ORPH) a buy, sell, or hold? The smart money was taking an optimistic view. The number of long hedge fund bets improved by 1 lately. Orphazyme A/S (NASDAQ:ORPH) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 5. Our calculations also showed that ORPH 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
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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 we're going to go over the recent hedge fund action regarding Orphazyme A/S (NASDAQ:ORPH).
Do Hedge Funds Think ORPH Is A Good Stock To Buy Now?
At Q1's end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ORPH over the last 23 quarters. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Point72 Asset Management was the largest shareholder of Orphazyme A/S (NASDAQ:ORPH), with a stake worth $1.1 million reported as of the end of March. Trailing Point72 Asset Management was Millennium Management, which amassed a stake valued at $1 million. CaaS Capital was 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 Point72 Asset Management allocated the biggest weight to Orphazyme A/S (NASDAQ:ORPH), around 0.01% of its 13F portfolio. CaaS Capital is also relatively very bullish on the stock, designating 0.0018 percent of its 13F equity portfolio to ORPH.
Now, key hedge funds were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, created the largest position in Orphazyme A/S (NASDAQ:ORPH). Point72 Asset Management had $1.1 million invested in the company at the end of the quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Orphazyme A/S (NASDAQ:ORPH) but similarly valued. These stocks are Precision Drilling Corp (NYSE:PDS), RR Donnelley & Sons Company (NYSE:RRD), Escalade, Inc. (NASDAQ:ESCA), Bluegreen Vacations Holding Corporation (NYSE:BVH), Trevena Inc (NASDAQ:TRVN), Mayville Engineering Company, Inc. (NYSE:MEC), and Immersion Corporation (NASDAQ:IMMR). All of these stocks' market caps resemble ORPH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PDS,6,25038,0 RRD,23,65071,10 ESCA,3,10058,-3 BVH,6,29254,0 TRVN,14,8402,7 MEC,3,3530,0 IMMR,20,71443,0 Average,10.7,30399,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.7 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $2 million in ORPH's case. RR Donnelley & Sons Company (NYSE:RRD) is the most popular stock in this table. On the other hand Escalade, Inc. (NASDAQ:ESCA) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Orphazyme A/S (NASDAQ:ORPH) is even less popular than ESCA. Our overall hedge fund sentiment score for ORPH is 24. 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. Hedge funds clearly dropped the ball on ORPH as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on ORPH as the stock returned 11.3% since Q1 (through June 11th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.