The market has been volatile as the Federal Reserve winds down its easy money policies. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25th and the end of October. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Regeneron Pharmaceuticals Inc (NASDAQ:REGN) and find out how it is affected by hedge funds’ moves.
Is Regeneron Pharmaceuticals Inc (NASDAQ:REGN) a great stock to buy now? Investors who are in the know are taking an optimistic view. The number of long hedge fund positions rose by 3 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as The TJX Companies, Inc. (NYSE:TJX), Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), and General Motors Company (NYSE:GM) to gather more data points.
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If you’d ask most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation at the moment, Our researchers look at the masters of this club, about 700 funds. These money managers control most of all hedge funds’ total asset base, and by observing their highest performing investments, Insider Monkey has unearthed many investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, let’s take a look at the latest action regarding Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
What does the smart money think about Regeneron Pharmaceuticals Inc (NASDAQ:REGN)?
At the end of Q3, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 10% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Samuel Isaly’s OrbiMed Advisors has the largest position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN), worth close to $226.8 million, corresponding to 2.3% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which holds a $131 million call position; 0.1% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions contain Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors, and D E Shaw.
As one would reasonably expect, key hedge funds were leading the bulls’ herd. Two Sigma Advisors assembled the most valuable position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN). Two Sigma Advisors had $106.7 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $27.6 million position during the quarter. The other funds with brand new Regeneron Pharmaceuticals Inc (NASDAQ:REGN) positions are Peter Muller’s PDT Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Krishen Sud’s Sivik Global Healthcare.
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 The TJX Companies, Inc. (NYSE:TJX), Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), General Motors Company (NYSE:GM), and EMC Corporation (NYSE:EMC). This group of stocks’ market values is similar to Regeneron Pharmaceuticals Inc (NASDAQ:REGN)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TJX | 37 | 1501811 | 4 |
| TEVA | 70 | 6803084 | -7 |
| GM | 88 | 5112756 | -16 |
| EMC | 65 | 3359159 | 11 |
As you can see, these stocks had an average of 65 hedge funds with bullish positions and the average amount invested in these stocks was $4.19 billion. That figure was $1.05 billion in Regeneron Pharmaceuticals Inc (NASDAQ:REGN)’s case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand, The TJX Companies, Inc. (NYSE:TJX) is the least popular one with only 37 bullish hedge fund positions. Compared to these stocks, Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is even less popular than The TJX Companies, Inc. (NYSE:TJX). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.
