Vanda Pharmaceuticals Inc. (NASDAQ:VNDA)’s shares have advanced by more than 9% after the U.S. Food and Drug Administration approved Vanda’s supplemental New Drug Application for expanding the prescribing information to include the effectiveness of Fanapt as a maintenance treatment for schizophrenia in adults. Fanapt is an atypical antipsychotic agent indicated for the treatment of schizophrenia. Expanding the use of Vanda will lead to more sales and potentially more cash flow. The FDA is also currently reviewing the company’s application for three years of marketing exclusivity based upon the expansion now approved in the supplemental New Drug Application.
This is definitely good news for investors, although Vanda Pharmaceuticals is not very popular among them and the stock was in just 22 hedge funds’ portfolios at the end of the first quarter of 2016, up by one fund over the quarter. However, 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 Agenus Inc (NASDAQ:AGEN), First Foundation Inc (NASDAQ:FFWM), and Carriage Services, Inc. (NYSE:CSV) to gather more data points.
Follow Vanda Pharmaceuticals Inc. (NASDAQ:VNDA)
Follow Vanda Pharmaceuticals Inc. (NASDAQ:VNDA)
If you’d ask most investors, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are more than 8000 funds in operation today, Our researchers look at the masters of this club, about 700 funds. These investment experts orchestrate bulk of the smart money’s total capital, and by tracking their matchless investments, Insider Monkey has deciphered various investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Keeping this in mind, let’s go over the recent action regarding Vanda Pharmaceuticals Inc. (NASDAQ:VNDA).
When looking at the institutional investors followed by Insider Monkey, Deerfield Management, managed by James E. Flynn, holds the most valuable position in Vanda Pharmaceuticals Inc. (NASDAQ:VNDA). Deerfield Management has a $50.1 million position in the stock, comprising 2.1% of its 13F portfolio. Coming in second is Palo Alto Investors, led by William Leland Edwards, holding a $33.7 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Other peers with similar optimism include John Paulson’s Paulson & Co, Jeffrey Jay and David Kroin’s Great Point Partners and Israel Englander’s Millennium Management.
On the next page, we are going to take a closer look at some funds that initiated stakes in Vanda Pharmaceuticals during the first quarter.
Now, specific money managers were leading the bulls’ herd. Pura Vida Investments, managed by Efrem Kamen, initiated the biggest position in Vanda Pharmaceuticals Inc. (NASDAQ:VNDA). Pura Vida Investments had $0.6 million invested in the company at the end of the quarter. Paul Orlin and Alex Porter’s Amici Capital also initiated a $0.4 million position during the quarter. The following funds were also among the new VNDA investors: Matthew Tewksbury’s Stevens Capital Management and Mike Vranos’s Ellington.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) but similarly valued. We will take a look at Agenus Inc (NASDAQ:AGEN), First Foundation Inc (NASDAQ:FFWM), Carriage Services, Inc. (NYSE:CSV), and Homeowners Choice Inc (NYSE:HCI). This group of stocks’ market caps are similar to VNDA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGEN | 13 | 55040 | -1 |
| FFWM | 13 | 59261 | 1 |
| CSV | 9 | 22668 | -1 |
| HCI | 9 | 7698 | -5 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $192 million in VNDA’s case. Agenus Inc (NASDAQ:AGEN) is the most popular stock in this table. On the other hand Carriage Services, Inc. (NYSE:CSV) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
