At Insider Monkey we follow around 730 hedge funds and other institutional investors and ahead of the New Year, several funds from our database have reported some interesting moves. In this article, we are going to take a closer look at a new position that has just been disclosed by Steve Cohen‘s Point72 Asset Management, as well as two bullish moves reported by Abrams Capital Management and HealthCor Management.
Why do we follow these investors? We have determined that imitating some of the picks that they are collectively bullish on, can help us achieve market-beating returns over the long-term. The key is to focus on the favorite small-cap stocks of these funds. Our strategy involves identifying the top 15 small-cap companies that the funds from our database are collectively fond of and since August 2012 this approach has generated gains of around 102%, outperforming the S&P 500 ETF (SPY) by some 53 percentage points (see more details here).
Without any further ado, let’s start with Chimerix Inc (NASDAQ:CMRX), which represents the new position in the equity portfolio of Steven Cohen’s Point72 Asset Management. Cohen is known for making many successful bets, which is why his moves are almost always scrutinized. In this case, it’s particularly interesting, since Chimerix Inc (NASDAQ:CMRX)’s stock has lost more than 80% of its value on Monday, following the disclosure of poor results from the Phase 3 trial of brincidofovir in the prevention of cytomegalovirus in patients that went through hematopoietic stem cell transplants. Nevertheless, the company said that it remains optimistic about the product and believes that it has potential. According to a new 13G filing, Point72 Asset Management has initiated a 5.3% stake that contains 2.45 million shares and today the stock is up by nearly 15% on the back of the news. Following the report, most analysts covering Chimerix Inc (NASDAQ:CMRX) downgraded the stock, but none of them rated the stock as a ‘Sell’ and the price target cuts still indicate some considerable upside potential. Healthcare-focused fund Samuel Isaly’s OrbiMed Advisors was also bullish on Chimerix at the end of September, disclosing 1.02 million shares in its last 13F filing.
On the following page, we are going to take a closer look at the bullish moves reported by the other two funds that have been mentioned earlier.
In another 13G filing, David Abrams‘ Abrams Capital Management reported holding 7.23 million shares of Manitowoc Company Inc (NYSE:MTW), which represents an increase from some 5.01 million shares that the fund disclosed in its last 13F filing. The new position represents 5.29% of Manitowoc’s outstanding stock. Abrams added the stock to its equity portfolio during the third quarter and has probably increased the position ahead of the planned split of the company. Earlier this year, amid pressure from activist investor Carl Icahn, Manitowoc Company Inc (NYSE:MTW) announced that it would separate into two individual companies responsible for its crane and Foodservice segments at the beginning of 2016. Even though both businesses have been struggling, other investors, including Ralph V. Whitworth’s Relational Investors and Larry Robbins’ Glenview Capital have been suggesting that Manitowoc would be better positioned if it separates its businesses. Carl Icahn’s Icahn Capital and Glenview Capital held 10.58 million shares and 9.61 million shares of Manitowoc at the end of September. Relational Investors closed its position during the second quarter of 2015.
Finally, Sagent Pharmaceuticals Inc (NASDAQ:SGNT) has been bumped up in HealthCor Management’s portfolio. HealthCor, a healthcare-focused hedge fund led by Arthur B. Cohen and Joseph Healey reported holding 1.65 million shares of Sagent in a new 13G filing, which represents 5.03% of the outstanding stock. In its last 13F filing, the fund disclosed holding 1.25 million shares of the company. Sagent is a small-cap developer of generic injectable pharmaceuticals, whose stock is down by over 37% since the beginning of the year. HealthCor added the company to its 13F portfolio during the second quarter, reporting a position of 912,381 shares as of the end of June and further increased the stake between July and September. At 19.9 times earnings, Sagent Pharmaceuticals Inc (NASDAQ:SGNT) is cheaper than many of its industry peers, but smart money investors seem to be cautious towards the stock. During the third quarter, the number of funds with long positions is Sagent slid to 10 from 18, but the funds we track still amassed nearly 13% of its outstanding stock at the end of September. The latest increase, solidified HealthCor’s position as the largest shareholder of Sagent Pharmaceuticals Inc (NASDAQ:SGNT) (among the funds we track) and some other top investors are also bullish. For example, Matt Sirovich and Jeremy Mindich’s Scopia Capital initiated a stake containing 1.10 million shares, while Israel Englander’s Millennium Management almost doubled its position to 595,491 shares during the third quarter.
Disclosure: none
