It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 24.4% during the first 9 months of 2019 and outperformed the S&P 500 ETF by 4 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards Radius Health Inc (NASDAQ:RDUS) changed during the first quarter.
Radius Health Inc (NASDAQ:RDUS) investors should pay attention to a decrease in hedge fund interest in recent months. RDUS was in 16 hedge funds' portfolios at the end of the second quarter of 2019. There were 22 hedge funds in our database with RDUS positions at the end of the previous quarter. Our calculations also showed that RDUS isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a multitude of indicators shareholders use to size up publicly traded companies. A duo of the most innovative indicators are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the broader indices by a significant amount (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, 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. Let's analyze the recent hedge fund action surrounding Radius Health Inc (NASDAQ:RDUS).
How have hedgies been trading Radius Health Inc (NASDAQ:RDUS)?
At Q2's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -27% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in RDUS a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Radius Health Inc (NASDAQ:RDUS) was held by Millennium Management, which reported holding $57.7 million worth of stock at the end of March. It was followed by Farallon Capital with a $49.8 million position. Other investors bullish on the company included Rubric Capital Management, Citadel Investment Group, and D E Shaw.
Due to the fact that Radius Health Inc (NASDAQ:RDUS) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few hedge funds who sold off their full holdings heading into Q3. At the top of the heap, Mitchell Blutt's Consonance Capital Management said goodbye to the largest stake of the 750 funds followed by Insider Monkey, valued at close to $7.5 million in stock. Dmitry Balyasny's fund, Balyasny Asset Management, also dumped its stock, about $1.4 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 6 funds heading into Q3.
Let's check out hedge fund activity in other stocks similar to Radius Health Inc (NASDAQ:RDUS). We will take a look at Enterprise Financial Services Corp (NASDAQ:EFSC), Teekay LNG Partners L.P. (NYSE:TGP), Lantheus Holdings Inc (NASDAQ:LNTH), and ARMOUR Residential REIT, Inc. (NYSE:ARR). All of these stocks' market caps match RDUS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EFSC,13,52710,-2 TGP,9,43758,1 LNTH,15,103780,-3 ARR,8,66931,0 Average,11.25,66795,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $328 million in RDUS's case. Lantheus Holdings Inc (NASDAQ:LNTH) is the most popular stock in this table. On the other hand ARMOUR Residential REIT, Inc. (NYSE:ARR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Radius Health Inc (NASDAQ:RDUS) is more popular among hedge funds. 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. Hedge funds were also right about betting on RDUS, though not to the same extent, as the stock returned 5.7% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
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