Should You Follow Smart Money Into Vertex Pharmaceuticals Incorporated (VRTX)?

Consequently, specific money managers have been driving this bullishness. Tourbillon Capital Partners, managed by Jason Karp, created the biggest position in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). Tourbillon Capital Partners had $20.8 million invested in the company at the end of the quarter. Charles Clough’s Clough Capital Partners also made a $20.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Clifford Fox’s Columbus Circle Investors, Eric Bannasch’s Cadian Capital, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) but similarly valued. These stocks are Illumina, Inc. (NASDAQ:ILMN), Archer Daniels Midland Company (NYSE:ADM), Cardinal Health, Inc. (NYSE:CAH), and Southwest Airlines Co. (NYSE:LUV). This group of stocks’ market values resemble VRTX’s market value.

As you can see these stocks had an average of 47.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.60 billion, versus $1.41 billion in VRTX’s case. Illumina, Inc. (NASDAQ:ILMN) is the most popular stock in this table with 62 long positions, while Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), even though it is not the most popular stock in this group, it registers a hedge fund interest above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ILMN might be a better candidate to consider a long position.