Did Hedge Funds Drop The Ball On Repligen Corporation (RGEN) ?

We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Repligen Corporation (NASDAQ:RGEN) and determine whether hedge funds skillfully traded this stock.

Is Repligen Corporation (NASDAQ:RGEN) a healthy stock for your portfolio? The best stock pickers were getting less bullish. The number of long hedge fund positions were cut by 2 recently. Our calculations also showed that RGEN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). RGEN was in 21 hedge funds’ portfolios at the end of the first quarter of 2020. There were 23 hedge funds in our database with RGEN positions at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most shareholders, hedge funds are seen as underperforming, old financial tools of the past. While there are more than 8000 funds trading at the moment, We choose to focus on the moguls of this club, around 850 funds. These hedge fund managers preside over most of all hedge funds’ total asset base, and by paying attention to their matchless equity investments, Insider Monkey has figured out several investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .


Paul Tudor Jones of Tudor Investment Corp

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. With all of this in mind let’s take a gander at the key hedge fund action regarding Repligen Corporation (NASDAQ:RGEN).

How are hedge funds trading Repligen Corporation (NASDAQ:RGEN)?

At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in RGEN a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, 12 West Capital Management held the most valuable stake in Repligen Corporation (NASDAQ:RGEN), which was worth $113.8 million at the end of the third quarter. On the second spot was Marshall Wace LLP which amassed $54.5 million worth of shares. Select Equity Group, Renaissance Technologies, and Impax Asset 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 12 West Capital Management allocated the biggest weight to Repligen Corporation (NASDAQ:RGEN), around 6.78% of its 13F portfolio. Miura Global Management is also relatively very bullish on the stock, earmarking 1.87 percent of its 13F equity portfolio to RGEN.

Due to the fact that Repligen Corporation (NASDAQ:RGEN) has experienced a decline in interest from the smart money, it’s safe to say that there were a few funds that slashed their full holdings by the end of the first quarter. Interestingly, Kevin Molloy’s Iron Triangle Partners dumped the largest investment of all the hedgies tracked by Insider Monkey, comprising close to $13.9 million in stock. Michael Kharitonov and Jon David McAuliffe’s fund, Voleon Capital, also sold off its stock, about $7.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds by the end of the first quarter.

Let’s now review hedge fund activity in other stocks similar to Repligen Corporation (NASDAQ:RGEN). We will take a look at Haemonetics Corporation (NYSE:HAE), RealPage, Inc. (NASDAQ:RP), Kinross Gold Corporation (NYSE:KGC), and Pentair plc (NYSE:PNR). This group of stocks’ market values are similar to RGEN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HAE 34 710291 1
RP 29 603843 -7
KGC 28 447018 3
PNR 29 391097 3
Average 30 538062 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $538 million. That figure was $322 million in RGEN’s case. Haemonetics Corporation (NYSE:HAE) is the most popular stock in this table. On the other hand Kinross Gold Corporation (NYSE:KGC) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks Repligen Corporation (NASDAQ:RGEN) is even less popular than KGC. Hedge funds clearly dropped the ball on RGEN as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 18.6% in 2020 through July 27th and still beat the market by 17.1 percentage points. A small number of hedge funds were also right about betting on RGEN as the stock returned 42.6% since the end of March and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.