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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 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 Ligand Pharmaceuticals Inc. (NASDAQ:LGND).
Ligand Pharmaceuticals Inc. (NASDAQ:LGND) has seen an increase in enthusiasm from smart money of late. LGND was in 27 hedge funds' portfolios at the end of March. There were 23 hedge funds in our database with LGND positions at the end of the previous quarter. Our calculations also showed that LGND 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In the eyes of most investors, hedge funds are viewed as worthless, outdated investment tools of years past. While there are over 8000 funds with their doors open at present, Our researchers look at the moguls of this club, around 850 funds. These hedge fund managers orchestrate most of the smart money's total capital, and by tracking their best picks, Insider Monkey has figured out many investment strategies that have historically surpassed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
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Charles Davidson of Wexford Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. Keeping this in mind let's take a look at the fresh hedge fund action surrounding Ligand Pharmaceuticals Inc. (NASDAQ:LGND).
How are hedge funds trading Ligand Pharmaceuticals Inc. (NASDAQ:LGND)?
Heading into the second quarter of 2020, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in LGND a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Ligand Pharmaceuticals Inc. (NASDAQ:LGND) was held by Cardinal Capital, which reported holding $71.4 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $43.6 million position. Other investors bullish on the company included Dorset Management, Ikarian Capital, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Dorset Management allocated the biggest weight to Ligand Pharmaceuticals Inc. (NASDAQ:LGND), around 16.2% of its 13F portfolio. Stonepine Capital is also relatively very bullish on the stock, designating 12.38 percent of its 13F equity portfolio to LGND.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Stonepine Capital, managed by Timothy P. Lynch, created the most outsized position in Ligand Pharmaceuticals Inc. (NASDAQ:LGND). Stonepine Capital had $11.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $2 million position during the quarter. The other funds with brand new LGND positions are Michael Rockefeller and KarláKroeker's Woodline Partners, Lawrence Hawkins's Prosight Capital, and Charles Davidson and Joseph Jacobs's Wexford Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Ligand Pharmaceuticals Inc. (NASDAQ:LGND) but similarly valued. We will take a look at MicroStrategy Incorporated (NASDAQ:MSTR), Innoviva, Inc. (NASDAQ:INVA), Atrion Corporation (NASDAQ:ATRI), and Tri Pointe Group Inc (NYSE:TPH). This group of stocks' market caps are similar to LGND's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MSTR,18,63901,-7 INVA,19,252057,0 ATRI,12,68214,-3 TPH,27,142074,-5 Average,19,131562,-3.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $132 million. That figure was $242 million in LGND's case. Tri Pointe Group Inc (NYSE:TPH) is the most popular stock in this table. On the other hand Atrion Corporation (NASDAQ:ATRI) is the least popular one with only 12 bullish hedge fund positions. Ligand Pharmaceuticals Inc. (NASDAQ:LGND) 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 LGND as the stock returned 39.7% 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.