Was The Smart Money Right About Regeneron Pharmaceuticals (REGN)?
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. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
Is Regeneron Pharmaceuticals Inc (NASDAQ:REGN) a healthy stock for your portfolio? Investors who are in the know were becoming more confident. The number of bullish hedge fund bets moved up by 2 lately. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was in 46 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 49. Our calculations also showed that REGN isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Louis Bacon Moore of Moore Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we're going to go over the fresh hedge fund action encompassing Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
Do Hedge Funds Think REGN Is A Good Stock To Buy Now?
At the end of December, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. On the other hand, there were a total of 37 hedge funds with a bullish position in REGN a year ago. 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, Renaissance Technologies has the most valuable position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN), worth close to $437.2 million, corresponding to 0.5% of its total 13F portfolio. The second largest stake is held by Catherine D. Wood of ARK Investment Management, with a $218.3 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish consist of Cliff Asness's AQR Capital Management, Israel Englander's Millennium Management and Steven Boyd's Armistice Capital. In terms of the portfolio weights assigned to each position Sivik Global Healthcare allocated the biggest weight to Regeneron Pharmaceuticals Inc (NASDAQ:REGN), around 3.94% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, designating 2.85 percent of its 13F equity portfolio to REGN.
As one would reasonably expect, key hedge funds were breaking ground themselves. ARK Investment Management, managed by Catherine D. Wood, initiated the most valuable position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN). ARK Investment Management had $218.3 million invested in the company at the end of the quarter. Sander Gerber's Hudson Bay Capital Management also made a $18.6 million investment in the stock during the quarter. The following funds were also among the new REGN investors: Louis Bacon's Moore Global Investments, Michael Rockefeller and Karl Kroeker's Woodline Partners, and John Hempton's Bronte Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Regeneron Pharmaceuticals Inc (NASDAQ:REGN) but similarly valued. These stocks are Dollar General Corp. (NYSE:DG), ICICI Bank Limited (NYSE:IBN), Boston Scientific Corporation (NYSE:BSX), Northrop Grumman Corporation (NYSE:NOC), UBS Group AG (NYSE:UBS), Southern Copper Corporation (NYSE:SCCO), and Waste Management, Inc. (NYSE:WM). This group of stocks' market caps are closest to REGN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DG,57,1677239,1 IBN,29,1080794,5 BSX,58,3632909,-3 NOC,40,1507811,-2 UBS,18,184346,1 SCCO,23,572140,-4 WM,37,2937888,-1 Average,37.4,1656161,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.4 hedge funds with bullish positions and the average amount invested in these stocks was $1656 million. That figure was $1330 million in REGN's case. Boston Scientific Corporation (NYSE:BSX) is the most popular stock in this table. On the other hand UBS Group AG (NYSE:UBS) is the least popular one with only 18 bullish hedge fund positions. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for REGN is 70.2. 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. 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 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and beat the market again by 1.6 percentage points. Unfortunately REGN wasn't nearly as popular as these 10 stocks and hedge funds that were betting on REGN were disappointed as the stock returned -0.4% since the end of December (through 4/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
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