Are Hedge Funds Dumping Amicus Therapeutics, Inc. (FOLD)?

The third-quarter stock market correction has turned out to resemble the situation observed during the Asian financial crisis of 1997. The two relatively short-lived corrections occurred at a time with stable interest rates, falling commodity markets, with strong-performing technology and healthcare sectors, and struggling energy sector. Similarly, the two corrections followed long periods without a correction, which had to come sooner or later and it did. Even so, several prominent hedge fund investors publicly asserted their bearish view on the current state of the U.S. equity markets, suggesting that they significantly cut their exposure to equities during the latest quarter. Having said that, it would be worthwhile to take a look at the hedge fund sentiment on Amicus Therapeutics, Inc. (NASDAQ:FOLD) in order to identify whether reputable and successful top money managers continue to believe in its potential.

Is Amicus Therapeutics, Inc. (NASDAQ:FOLD) worth your attention right now? The best stock pickers are becoming less confident. The number of bullish hedge fund bets decreased by 5 in recent months. At the end of this article we will also compare FOLD to other stocks, including Abengoa Yield PLC (NASDAQ:ABY), International Bancshares Corp (NASDAQ:IBOC), and ZS Pharma Inc (NASDAQ:ZSPH) to get a better sense of its popularity.

In today’s marketplace there are several metrics shareholders have at their disposal to evaluate their stock investments. Two of the most useful metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can outclass the broader indices by a significant margin (see the details here).

Keeping this in mind, we’re going to take a peek at the new action surrounding Amicus Therapeutics, Inc. (NASDAQ:FOLD).

How are hedge funds trading Amicus Therapeutics, Inc. (NASDAQ:FOLD)?

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the second quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Joseph Edelman’s Perceptive Advisors has the number one position in Amicus Therapeutics, Inc. (NASDAQ:FOLD), worth close to $175.6 million, comprising 14% of its total 13F portfolio. Sitting at the No. 2 spot is Redmile Group, managed by Jeremy Green, which holds a $116.6 million position; 2.7% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism comprise Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Ken Griffin’s Citadel Investment Group and Kurt von Emster’s venBio Select Advisor.

Due to the fact that Amicus Therapeutics, Inc. (NASDAQ:FOLD) has faced a decline in interest from hedge fund managers, we can see that there were a few hedgies that slashed their positions entirely last quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management dumped the biggest position of the 700 funds tracked by Insider Monkey, totaling close to $13 million in stock. Nick Niell’s fund, Arrowgrass Capital Partners, also sold off its stake, about $8.5 million worth. These moves are important to note, as aggregate hedge fund interest fell by 5 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Amicus Therapeutics, Inc. (NASDAQ:FOLD). We will take a look at Abengoa Yield PLC (NASDAQ:ABY), International Bancshares Corp (NASDAQ:IBOC), ZS Pharma Inc (NASDAQ:ZSPH), and National Penn Bancshares (NASDAQ:NPBC). This group of stocks’ market valuations resemble FOLD’s market valuation.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $264 million, compared to $631 million in FOLD’s case. ZS Pharma Inc (NASDAQ:ZSPH) is the most popular stock in this table with 20 funds reporting stakes, while International Bancshares Corp (NASDAQ:IBOC) is the least popular one. Compared to these stocks Amicus Therapeutics, Inc. (NASDAQ:FOLD) is more popular among hedge funds, despite the drop in the number of funds with long positions. 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.