After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards BeiGene, Ltd. (NASDAQ:BGNE).
BeiGene, Ltd. (NASDAQ:BGNE) investors should pay attention to a decrease in hedge fund interest recently. BeiGene, Ltd. (NASDAQ:BGNE) was in 19 hedge funds’ portfolios at the end of March. The all time high for this statistic is 23. There were 21 hedge funds in our database with BGNE positions at the end of the fourth quarter. Our calculations also showed that BGNE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
At the moment there are plenty of gauges stock traders can use to value stocks. A pair of the most underrated gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the broader indices by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Felix Baker of Baker Bros.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to go over the fresh hedge fund action surrounding BeiGene, Ltd. (NASDAQ:BGNE).
Do Hedge Funds Think BGNE Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the fourth quarter of 2020. By comparison, 11 hedge funds held shares or bullish call options in BGNE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Baker Bros. Advisors was the largest shareholder of BeiGene, Ltd. (NASDAQ:BGNE), with a stake worth $4061.7 million reported as of the end of March. Trailing Baker Bros. Advisors was Hillhouse Capital Management, which amassed a stake valued at $1904.8 million. Rock Springs Capital Management, Casdin Capital, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hillhouse Capital Management allocated the biggest weight to BeiGene, Ltd. (NASDAQ:BGNE), around 18.82% of its 13F portfolio. Baker Bros. Advisors is also relatively very bullish on the stock, earmarking 17.61 percent of its 13F equity portfolio to BGNE.
Since BeiGene, Ltd. (NASDAQ:BGNE) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of money managers that decided to sell off their positions entirely heading into Q2. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the biggest investment of the 750 funds tracked by Insider Monkey, comprising close to $19.2 million in stock, and D. E. Shaw’s D E Shaw was right behind this move, as the fund dropped about $13.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds heading into Q2.
Let’s now take a look at hedge fund activity in other stocks similar to BeiGene, Ltd. (NASDAQ:BGNE). We will take a look at Archer Daniels Midland Company (NYSE:ADM), Motorola Solutions Inc (NYSE:MSI), Republic Services, Inc. (NYSE:RSG), Companhia Paranaense de Energia – COPEL (NYSE:ELP), ArcelorMittal (NYSE:MT), Palo Alto Networks Inc (NYSE:PANW), and V.F. Corporation (NYSE:VFC). This group of stocks’ market values are closest to BGNE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADM | 34 | 696043 | -1 |
| MSI | 29 | 1000522 | -6 |
| RSG | 36 | 1073744 | 0 |
| ELP | 5 | 36122 | -4 |
| MT | 21 | 709788 | 3 |
| PANW | 64 | 4015196 | 3 |
| VFC | 31 | 1109135 | 0 |
| Average | 31.4 | 1234364 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.4 hedge funds with bullish positions and the average amount invested in these stocks was $1234 million. That figure was $6242 million in BGNE’s case. Palo Alto Networks Inc (NYSE:PANW) is the most popular stock in this table. On the other hand Companhia Paranaense de Energia – COPEL (NYSE:ELP) is the least popular one with only 5 bullish hedge fund positions. BeiGene, Ltd. (NASDAQ:BGNE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BGNE is 39.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately BGNE wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BGNE investors were disappointed as the stock returned -6.3% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Beigene Ltd. (NASDAQ:BGNE)
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Disclosure: None. This article was originally published at Insider Monkey.
