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Did Hedge Funds Make The Right Call On Corcept Therapeutics Incorporated (CORT) ?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Corcept Therapeutics Incorporated (NASDAQ:CORT) based on that data and determine whether they were really smart about the stock.

Corcept Therapeutics Incorporated (NASDAQ:CORT) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds’ portfolios at the end of the first quarter of 2020. 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 Hilton Grand Vacations Inc. (NYSE:HGV), Glaukos Corporation (NYSE:GKOS), and InVitae Corporation (NYSE:NVTA) to gather more data points. Our calculations also showed that CORT 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).

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

To the average investor there are a large number of indicators investors use to grade stocks. A couple of the most under-the-radar indicators are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best investment managers can outpace the broader indices by a superb margin (see the details here).

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

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. Now let’s analyze the new hedge fund action regarding Corcept Therapeutics Incorporated (NASDAQ:CORT).

What have hedge funds been doing with Corcept Therapeutics Incorporated (NASDAQ:CORT)?

At Q1’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CORT over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

Is CORT A Good Stock To Buy?

More specifically, Renaissance Technologies was the largest shareholder of Corcept Therapeutics Incorporated (NASDAQ:CORT), with a stake worth $98.7 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $14.1 million. GLG Partners, Winton Capital Management, and Marshall Wace LLP 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 Zebra Capital Management allocated the biggest weight to Corcept Therapeutics Incorporated (NASDAQ:CORT), around 0.72% of its 13F portfolio. Birchview Capital is also relatively very bullish on the stock, setting aside 0.53 percent of its 13F equity portfolio to CORT.

Since Corcept Therapeutics Incorporated (NASDAQ:CORT) has witnessed a decline in interest from hedge fund managers, we can see that there was a specific group of hedge funds who sold off their entire stakes by the end of the first quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management sold off the biggest position of all the hedgies tracked by Insider Monkey, totaling about $0.7 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund sold off about $0.4 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Corcept Therapeutics Incorporated (NASDAQ:CORT) but similarly valued. These stocks are Hilton Grand Vacations Inc. (NYSE:HGV), Glaukos Corporation (NYSE:GKOS), InVitae Corporation (NYSE:NVTA), and 2U Inc (NASDAQ:TWOU). This group of stocks’ market values resemble CORT’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HGV 29 512572 -17
GKOS 15 83596 -1
NVTA 10 225622 -3
TWOU 14 157558 -4
Average 17 244837 -6.25

View table here if you experience formatting issues.

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 $245 million. That figure was $160 million in CORT’s case. Hilton Grand Vacations Inc. (NYSE:HGV) is the most popular stock in this table. On the other hand InVitae Corporation (NYSE:NVTA) is the least popular one with only 10 bullish hedge fund positions. Corcept Therapeutics Incorporated (NASDAQ:CORT) is not the most popular stock in this group but hedge fund interest is still above average. 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 but still beat the market by 17.1 percentage points. Hedge funds were also right about betting on CORT as the stock returned 40.1% since Q1 and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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