With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA).
Is Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) a bargain? Hedge funds are in a bullish mood. The number of bullish hedge fund bets improved by 1 in recent months. Our calculations also showed that MNTA isn't among the 30 most popular stocks among hedge funds. MNTA was in 18 hedge funds' portfolios at the end of the third quarter of 2018. There were 17 hedge funds in our database with MNTA holdings at the end of the previous quarter.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's take a peek at the latest hedge fund action regarding Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA).
Hedge fund activity in Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA)
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the second quarter of 2018. By comparison, 14 hedge funds held shares or bullish call options in MNTA heading into this year. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Camber Capital Management, managed by Stephen DuBois, holds the biggest position in Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA). Camber Capital Management has a $75.7 million position in the stock, comprising 3.2% of its 13F portfolio. The second most bullish fund manager is D. E. Shaw of D E Shaw, with a $51.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions consist of William Leland Edwards's Palo Alto Investors, Peter Kolchinsky's RA Capital Management and Jim Simons's Renaissance Technologies.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) headfirst. Millennium Management, managed by Israel Englander, established the biggest position in Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA). Millennium Management had $7.2 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle's Springbok Capital also initiated a $1.2 million position during the quarter. The other funds with new positions in the stock are Jerome Pfund and Michael Sjostrom's Sectoral Asset Management and Andrew Feldstein and Stephen Siderow's Blue Mountain Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) but similarly valued. These stocks are The Navigators Group, Inc (NASDAQ:NAVG), Acushnet Holdings Corp. (NYSE:GOLF), Allegiant Travel Company (NASDAQ:ALGT), and DoubleLine Income Solutions Fund (NYSE:DSL). This group of stocks' market valuations are similar to MNTA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NAVG,17,193595,5 GOLF,14,39395,6 ALGT,15,428697,0 DSL,2,17849,0 Average,12,169884,2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $170 million. That figure was $301 million in MNTA's case. The Navigators Group, Inc (NASDAQ:NAVG) is the most popular stock in this table. On the other hand DoubleLine Income Solutions Fund (NYSE:DSL) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.