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Intercept Pharmaceuticals Inc (ICPT): Are Hedge Funds Right About This Stock?

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Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.

Is Intercept Pharmaceuticals Inc (NASDAQ:ICPT) a superb investment today? Hedge funds are becoming less confident. The number of long hedge fund bets experienced a decline of 2 lately. ICPT was in 15 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with ICPT positions at the end of the previous quarter. At the end of this article we will also compare ICPT to other stocks including Morningstar, Inc. (NASDAQ:MORN), Oshkosh Corporation (NYSE:OSK), and Lancaster Colony Corp. (NASDAQ:LANC) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Hedge fund activity in Intercept Pharmaceuticals Inc (NASDAQ:ICPT)

Heading into the fourth quarter of 2016, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a 12% fall from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ICPT over the last 5 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

icpt
Of the funds tracked by Insider Monkey, OrbiMed Advisors, led by Samuel Isaly, holds the largest position in Intercept Pharmaceuticals Inc (NASDAQ:ICPT). OrbiMed Advisors has a $184.3 million position in the stock, comprising 2.1% of its 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, which holds a $70.2 million position. Some other peers that hold long positions comprise Jonathon Jacobson’s Highfields Capital Management, Daniel Gold’s QVT Financial and Principal Global Investors’ Columbus Circle Investors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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