Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That's why we pay special attention to hedge fund activity in these stocks.
Is Regeneron Pharmaceuticals Inc (NASDAQ:REGN) a good investment now? Prominent investors are turning bullish. The number of long hedge fund positions moved up by 6 lately. Our calculations also showed that REGN isn't among the 30 most popular stocks among hedge funds.
According to most market participants, hedge funds are assumed to be unimportant, old financial tools of yesteryear. While there are greater than 8000 funds trading at present, Our experts hone in on the leaders of this group, approximately 750 funds. Most estimates calculate that this group of people handle most of the smart money's total capital, and by monitoring their first-class picks, Insider Monkey has unsheathed numerous investment strategies that have historically beaten Mr. Market. Insider Monkey's flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a glance at the key hedge fund action surrounding Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
Hedge fund activity in Regeneron Pharmaceuticals Inc (NASDAQ:REGN)
At the end of the second quarter, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in REGN over the last 16 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was held by Citadel Investment Group, which reported holding $179.3 million worth of stock at the end of March. It was followed by Point72 Asset Management with a $151.4 million position. Other investors bullish on the company included Millennium Management, Arrowstreet Capital, and AQR Capital Management.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, initiated the biggest position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN). Point72 Asset Management had $151.4 million invested in the company at the end of the quarter. Steven Boyd's Armistice Capital also initiated a $38.8 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace's Marshall Wace LLP, Israel Englander's Millennium Management, and Mark Kingdon's Kingdon Capital.
Let's go over hedge fund activity in other stocks similar to Regeneron Pharmaceuticals Inc (NASDAQ:REGN). These stocks are Eaton Corporation plc (NYSE:ETN), V.F. Corporation (NYSE:VFC), The Allstate Corporation (NYSE:ALL), and The Royal Bank of Scotland Group plc (NYSE:RBS). All of these stocks' market caps are similar to REGN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ETN,36,796336,-3 VFC,32,985424,3 ALL,37,1897886,1 RBS,6,33528,3 Average,27.75,928294,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $928 million. That figure was $1331 million in REGN's case. The Allstate Corporation (NYSE:ALL) is the most popular stock in this table. On the other hand The Royal Bank of Scotland Group plc (NYSE:RBS) is the least popular one with only 6 bullish hedge fund positions. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately REGN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on REGN were disappointed as the stock returned -11.4% during the third 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 (see the video below) among hedge funds as many of these stocks already outperformed the market so far this year. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.