In this article we will take a look at whether hedge funds think Radius Health Inc (NASDAQ:RDUS) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Radius Health Inc (NASDAQ:RDUS) a buy here? Hedge funds are taking an optimistic view. The number of bullish hedge fund positions inched up by 1 lately. Our calculations also showed that RDUS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a multitude of methods stock traders use to size up publicly traded companies. Some of the most useful methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outclass their index-focused peers by a solid margin (see the details here).
[caption id="attachment_364887" align="aligncenter" width="397"] Kris Jenner of Rock Springs Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a glance at the recent hedge fund action encompassing Radius Health Inc (NASDAQ:RDUS).
Hedge fund activity in Radius Health Inc (NASDAQ:RDUS)
Heading into the second quarter of 2020, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RDUS over the last 18 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in Radius Health Inc (NASDAQ:RDUS) was held by Farallon Capital, which reported holding $26.7 million worth of stock at the end of September. It was followed by Rubric Capital Management with a $16 million position. Other investors bullish on the company included Rock Springs Capital Management, D E Shaw, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Rubric Capital Management allocated the biggest weight to Radius Health Inc (NASDAQ:RDUS), around 2.52% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, dishing out 1.69 percent of its 13F equity portfolio to RDUS.
Consequently, some big names were leading the bulls' herd. Tang Capital Management, managed by Kevin C. Tang, assembled the largest position in Radius Health Inc (NASDAQ:RDUS). Tang Capital Management had $3.9 million invested in the company at the end of the quarter. Henrik Rhenman's Rhenman & Partners Asset Management also made a $3.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Mika Toikka's AlphaCrest Capital Management and Mike Vranos's Ellington.
Let's now take a look at hedge fund activity in other stocks similar to Radius Health Inc (NASDAQ:RDUS). We will take a look at Revolve Group, Inc. (NYSE:RVLV), Inseego Corp. (NASDAQ:INSG), BELLUS Health Inc. (NASDAQ:BLU), and Translate Bio, Inc. (NASDAQ:TBIO). This group of stocks' market valuations resemble RDUS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RVLV,10,11180,-1 INSG,12,18676,4 BLU,14,156516,-2 TBIO,7,224195,-2 Average,10.75,102642,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $103 million. That figure was $111 million in RDUS's case. BELLUS Health Inc. (NASDAQ:BLU) is the most popular stock in this table. On the other hand Translate Bio, Inc. (NASDAQ:TBIO) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Radius Health Inc (NASDAQ:RDUS) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. Unfortunately RDUS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on RDUS were disappointed as the stock returned 1.2% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.