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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. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of PTC Therapeutics, Inc. (NASDAQ:PTCT).
PTC Therapeutics, Inc. (NASDAQ:PTCT) has seen an increase in activity from the world's largest hedge funds in recent months. PTC Therapeutics, Inc. (NASDAQ:PTCT) was in 24 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 36. There were 23 hedge funds in our database with PTCT positions at the end of the fourth quarter. Our calculations also showed that PTCT isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David E. Shaw of D.E. Shaw
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. With all of this in mind we're going to take a peek at the latest hedge fund action encompassing PTC Therapeutics, Inc. (NASDAQ:PTCT).
Do Hedge Funds Think PTCT Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from one quarter earlier. By comparison, 28 hedge funds held shares or bullish call options in PTCT 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.
According to Insider Monkey's hedge fund database, Steven Boyd's Armistice Capital has the most valuable position in PTC Therapeutics, Inc. (NASDAQ:PTCT), worth close to $66.1 million, corresponding to 1.5% of its total 13F portfolio. Sitting at the No. 2 spot is D E Shaw, managed by D. E. Shaw, which holds a $55.4 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions include Jerome Pfund and Michael Sjostrom's Sectoral Asset Management, Michael Rockefeller and KarláKroeker's Woodline Partners and Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners. In terms of the portfolio weights assigned to each position Burrage Capital Management allocated the biggest weight to PTC Therapeutics, Inc. (NASDAQ:PTCT), around 6.15% of its 13F portfolio. Sectoral Asset Management is also relatively very bullish on the stock, dishing out 1.81 percent of its 13F equity portfolio to PTCT.
As one would reasonably expect, some big names were leading the bulls' herd. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, initiated the most outsized position in PTC Therapeutics, Inc. (NASDAQ:PTCT). LMR Partners had $11 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $9.1 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace's Marshall Wace LLP, Karim Abbadi and Edward McBride's Centiva Capital, and Michael Gelband's ExodusPoint Capital.
Let's now take a look at hedge fund activity in other stocks similar to PTC Therapeutics, Inc. (NASDAQ:PTCT). We will take a look at LCI Industries (NYSE:LCII), ServisFirst Bancshares, Inc. (NYSE:SFBS), Pluralsight, Inc. (NASDAQ:PS), Avista Corp (NYSE:AVA), DouYu International Holdings Limited (NASDAQ:DOYU), Dorman Products Inc. (NASDAQ:DORM), and Sensient Technologies Corporation (NYSE:SXT). All of these stocks' market caps resemble PTCT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LCII,18,159246,2 SFBS,9,9892,0 PS,34,858839,-1 AVA,15,56958,5 DOYU,29,327651,2 DORM,21,98065,0 SXT,16,203825,-1 Average,20.3,244925,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $245 million. That figure was $232 million in PTCT's case. Pluralsight, Inc. (NASDAQ:PS) is the most popular stock in this table. On the other hand ServisFirst Bancshares, Inc. (NYSE:SFBS) is the least popular one with only 9 bullish hedge fund positions. PTC Therapeutics, Inc. (NASDAQ:PTCT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PTCT is 56. 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 positive signal but 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 beat the market again by 7.7 percentage points. Unfortunately PTCT wasn't nearly as popular as these 5 stocks and hedge funds that were betting on PTCT were disappointed as the stock returned -8.8% 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.