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 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) and determine whether the smart money was really smart about this stock.
Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) was in 19 hedge funds' portfolios at the end of June. The all time high for this statistics is 21. RCKT has seen an increase in hedge fund interest in recent months. There were 15 hedge funds in our database with RCKT positions at the end of the first quarter. Our calculations also showed that RCKT isn't among the 30 most popular stocks among hedge funds (click for Q2 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 financial world there are many signals stock market investors use to grade stocks. A duo of the less utilized signals are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can trounce the market by a solid margin (see the details here).
Samuel Isaly of OrbiMed Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind we're going to take a peek at the fresh hedge fund action encompassing Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT).
How have hedgies been trading Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT)?
At the end of June, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in RCKT over the last 20 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Tang Capital Management, managed by Kevin C. Tang, holds the number one position in Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT). Tang Capital Management has a $62.1 million position in the stock, comprising 6% of its 13F portfolio. The second largest stake is held by Perceptive Advisors, managed by Joseph Edelman, which holds a $45.8 million position; 0.7% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish encompass Bihua Chen's Cormorant Asset Management, Ken Griffin's Citadel Investment Group and Albert Cha and Frank Kung's Vivo Capital. In terms of the portfolio weights assigned to each position Tang Capital Management allocated the biggest weight to Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), around 6.03% of its 13F portfolio. Ghost Tree Capital is also relatively very bullish on the stock, earmarking 3.59 percent of its 13F equity portfolio to RCKT.
Consequently, key money managers were breaking ground themselves. OrbiMed Advisors, managed by Samuel Isaly, initiated the largest position in Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT). OrbiMed Advisors had $8 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $4.3 million position during the quarter. The following funds were also among the new RCKT investors: Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, Andre F. Perold's HighVista Strategies, and John Overdeck and David Siegel's Two Sigma Advisors.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) but similarly valued. These stocks are CryoPort, Inc. (NASDAQ:CYRX), Park National Corporation (NYSE:PRK), Overstock.com, Inc. (NASDAQ:OSTK), The St. Joe Company (NYSE:JOE), Kadant Inc. (NYSE:KAI), Mr. Cooper Group Inc. (NASDAQ:COOP), and Arcus Biosciences, Inc. (NYSE:RCUS). This group of stocks' market valuations are similar to RCKT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CYRX,12,107787,3 PRK,12,12379,6 OSTK,15,136659,9 JOE,11,569625,0 KAI,5,61126,-2 COOP,24,287615,5 RCUS,28,271914,5 Average,15.3,206729,3.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $207 million. That figure was $238 million in RCKT's case. Arcus Biosciences, Inc. (NYSE:RCUS) is the most popular stock in this table. On the other hand Kadant Inc. (NYSE:KAI) is the least popular one with only 5 bullish hedge fund positions. Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RCKT is 66.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on RCKT, though not to the same extent, as the stock returned 9.2% in Q3 and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.