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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of PTC Therapeutics, Inc. (NASDAQ:PTCT).
PTC Therapeutics, Inc. (NASDAQ:PTCT) was in 23 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 36. PTCT investors should be aware of a decrease in enthusiasm from smart money in recent months. There were 24 hedge funds in our database with PTCT holdings at the end of March. Our calculations also showed that PTCT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Alex Litowitz of Magnetar Capital
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Do Hedge Funds Think PTCT Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PTCT over the last 24 quarters. 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 PTC Therapeutics, Inc. (NASDAQ:PTCT) was held by Armistice Capital, which reported holding $88.4 million worth of stock at the end of June. It was followed by D E Shaw with a $51.1 million position. Other investors bullish on the company included Point72 Asset Management, Woodline Partners, and Sectoral Asset Management. In terms of the portfolio weights assigned to each position Armistice Capital allocated the biggest weight to PTC Therapeutics, Inc. (NASDAQ:PTCT), around 1.58% of its 13F portfolio. Integral Health Asset Management is also relatively very bullish on the stock, earmarking 1.34 percent of its 13F equity portfolio to PTCT.
Since PTC Therapeutics, Inc. (NASDAQ:PTCT) has witnessed declining sentiment from the smart money, logic holds that there were a few fund managers who sold off their full holdings in the second quarter. Interestingly, Christiana Goh Bardon's Burrage Capital Management cut the largest position of all the hedgies watched by Insider Monkey, totaling about $7.6 million in stock, and Noam Gottesman's GLG Partners was right behind this move, as the fund cut about $1.8 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds in the second quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as PTC Therapeutics, Inc. (NASDAQ:PTCT) but similarly valued. These stocks are ABM Industries, Inc. (NYSE:ABM), Yelp Inc (NYSE:YELP), Renewable Energy Group Inc (NASDAQ:REGI), Avista Corp (NYSE:AVA), Greif, Inc. (NYSE:GEF), Patterson Companies, Inc. (NASDAQ:PDCO), and PJT Partners Inc (NYSE:PJT). This group of stocks' market valuations are closest to PTCT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABM,23,76336,6 YELP,27,544837,7 REGI,17,73707,-4 AVA,17,44746,2 GEF,13,139667,0 PDCO,23,159010,3 PJT,19,79293,-3 Average,19.9,159657,1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $160 million. That figure was $262 million in PTCT's case. Yelp Inc (NYSE:YELP) is the most popular stock in this table. On the other hand Greif, Inc. (NYSE:GEF) is the least popular one with only 13 bullish hedge fund positions. PTC Therapeutics, Inc. (NASDAQ:PTCT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PTCT is 58.9. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately PTCT wasn't nearly as popular as these 5 stocks and hedge funds that were betting on PTCT were disappointed as the stock returned -14.9% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 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.