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Is Prothena Corporation PLC (PRTA) Going to Burn These Hedge Funds?

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At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Prothena Corporation PLC (NASDAQ:PRTAshareholders have witnessed an increase in hedge fund interest of late. PRTA was in 15 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with PRTA holdings at the end of the previous quarter. At the end of this article we will also compare PRTA to other stocks including Depomed Inc (NASDAQ:DEPO), EXACT Sciences Corporation (NASDAQ:EXAS), and Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI) to get a better sense of its popularity.

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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How are hedge funds trading Prothena Corporation PLC (NASDAQ:PRTA)?

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PRTA over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
PRTA
Of the funds tracked by Insider Monkey, Neil Woodford’s Woodford Investment Management has the largest position in Prothena Corporation PLC (NASDAQ:PRTA), worth close to $617.4 million, corresponding to 25% of its total 13F portfolio. The second most bullish fund manager is Palo Alto Investors, led by William Leland Edwards, which holds a $56 million position; 3.3% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish contain Jeremy Green’s Redmile Group, Zach Schreiber’s Point State Capital and Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management. 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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