Is BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) 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, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Is BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) a worthy stock to buy now? Investors who are in the know are becoming less confident. The number of long hedge fund positions were cut by 2 lately. Our calculations also showed that bcrx isn't among the 30 most popular stocks among hedge funds. BCRX was in 18 hedge funds' portfolios at the end of December. There were 20 hedge funds in our database with BCRX holdings at the end of the previous quarter.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a peek at the fresh hedge fund action encompassing BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX).
How are hedge funds trading BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX)?
At the end of the fourth quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the second quarter of 2018. By comparison, 15 hedge funds held shares or bullish call options in BCRX a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Among these funds, Baker Bros. Advisors held the most valuable stake in BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), which was worth $121.9 million at the end of the fourth quarter. On the second spot was RA Capital Management which amassed $86 million worth of shares. Moreover, Great Point Partners, Deerfield Management, and D E Shaw were also bullish on BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), allocating a large percentage of their portfolios to this stock.
Seeing as BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) has experienced declining sentiment from hedge fund managers, it's easy to see that there exists a select few funds who were dropping their full holdings by the end of the third quarter. It's worth mentioning that Jim Simons's Renaissance Technologies dumped the largest investment of the "upper crust" of funds watched by Insider Monkey, comprising an estimated $1.7 million in stock, and Efrem Kamen's Pura Vida Investments was right behind this move, as the fund said goodbye to about $0.8 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) but similarly valued. These stocks are Talos Energy, Inc. (NYSE:TALO), Marten Transport, Ltd (NASDAQ:MRTN), Cray Inc. (NASDAQ:CRAY), and CONSOL Energy Inc. (NYSE:CEIX). This group of stocks' market caps are similar to BCRX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TALO,13,52918,-1 MRTN,17,44100,3 CRAY,14,62131,1 CEIX,25,123293,6 Average,17.25,70611,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $371 million in BCRX's case. CONSOL Energy Inc. (NYSE:CEIX) is the most popular stock in this table. On the other hand Talos Energy, Inc. (NYSE:TALO) is the least popular one with only 13 bullish hedge fund positions. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately BCRX wasn't nearly as popular as these 15 stock and hedge funds that were betting on BCRX were disappointed as the stock returned 1% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.