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 821 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, a week after the market trough. In this article we look at what those investors think of Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH).
Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 28 hedge funds' portfolios at the end of March. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Kohl's Corporation (NYSE:KSS), UMB Financial Corporation (NASDAQ:UMBF), and Alkermes Plc (NASDAQ:ALKS) to gather more data points. Our calculations also showed that DCPH 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.
In today’s marketplace there are a large number of gauges shareholders can use to evaluate publicly traded companies. A pair of the less utilized gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can trounce the broader indices by a superb margin (see the details here).
[caption id="attachment_339343" align="aligncenter" width="394"] Brad Farber of Atika Capital[/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 as well as this tiny lithium play. 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. Keeping this in mind we're going to take a look at the key hedge fund action surrounding Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH).
What have hedge funds been doing with Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH)?
At Q1's end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DCPH over the last 18 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) was held by Redmile Group, which reported holding $210.6 million worth of stock at the end of September. It was followed by Avoro Capital Advisors (venBio Select Advisor) with a $82.3 million position. Other investors bullish on the company included OrbiMed Advisors, Farallon Capital, and Polar Capital. In terms of the portfolio weights assigned to each position Redmile Group allocated the biggest weight to Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), around 5.91% of its 13F portfolio. Eversept Partners is also relatively very bullish on the stock, designating 4.32 percent of its 13F equity portfolio to DCPH.
Judging by the fact that Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) has faced bearish sentiment from the aggregate hedge fund industry, it's safe to say that there exists a select few funds who sold off their full holdings in the first quarter. At the top of the heap, Steve Cohen's Point72 Asset Management cut the largest stake of all the hedgies followed by Insider Monkey, valued at about $11.3 million in stock. Christiana Goh Bardon's fund, Burrage Capital Management, also said goodbye to its stock, about $3.7 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH). We will take a look at Kohl's Corporation (NYSE:KSS), UMB Financial Corporation (NASDAQ:UMBF), Alkermes Plc (NASDAQ:ALKS), and Teradata Corporation (NYSE:TDC). This group of stocks' market values resemble DCPH's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KSS,26,145325,-2 UMBF,15,46125,-4 ALKS,30,509143,-3 TDC,24,171880,-4 Average,23.75,218118,-3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $218 million. That figure was $604 million in DCPH's case. Alkermes Plc (NASDAQ:ALKS) is the most popular stock in this table. On the other hand UMB Financial Corporation (NASDAQ:UMBF) is the least popular one with only 15 bullish hedge fund positions. Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on DCPH as the stock returned 42.3% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.