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We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA) based on that data.
Is KNSA a good stock to buy now? Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA) has seen an increase in hedge fund interest lately. Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA) was in 20 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KNSA isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
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Ian Wace of Marshall Wace
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Do Hedge Funds Think KNSA Is A Good Stock To Buy Now?
At Q3's end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KNSA over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Hillhouse Capital Management was the largest shareholder of Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA), with a stake worth $44.7 million reported as of the end of September. Trailing Hillhouse Capital Management was Baker Bros. Advisors, which amassed a stake valued at $42.9 million. Consonance Capital Management, Vivo Capital, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Consonance Capital Management allocated the biggest weight to Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA), around 4.43% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, dishing out 1.72 percent of its 13F equity portfolio to KNSA.
As one would reasonably expect, specific money managers have been driving this bullishness. Sphera Global Healthcare Fund, managed by Doron Breen and Mori Arkin, assembled the most outsized position in Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA). Sphera Global Healthcare Fund had $4 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also made a $2.3 million investment in the stock during the quarter. The following funds were also among the new KNSA investors: Bhagwan Jay Rao's Integral Health Asset Management, Vishal Saluja and Pham Quang's Endurant Capital Management, and Renaissance Technologies.
Let's go over hedge fund activity in other stocks similar to Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA). We will take a look at BP Midstream Partners LP (NYSE:BPMP), TriMas Corp (NASDAQ:TRS), Esperion Therapeutics (NASDAQ:ESPR), BrightSphere Investment Group Inc (NYSE:BSIG), PGT Innovations Inc. (NASDAQ:PGTI), EVO Payments, Inc. (NASDAQ:EVOP), and Brooge Energy Limited (NASDAQ:BROG). This group of stocks' market valuations are closest to KNSA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BPMP,5,8204,2 TRS,14,70904,-3 ESPR,17,222235,-2 BSIG,25,374125,3 PGTI,11,79133,0 EVOP,15,34698,1 BROG,6,35733,0 Average,13.3,117862,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $118 million. That figure was $213 million in KNSA's case. BrightSphere Investment Group Inc (NYSE:BSIG) is the most popular stock in this table. On the other hand BP Midstream Partners LP (NYSE:BPMP) is the least popular one with only 5 bullish hedge fund positions. Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KNSA is 74.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on KNSA as the stock returned 27.1% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.