Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)? The smart money sentiment can provide an answer to this question.
Hedge fund interest in AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Stratasys, Ltd. (NASDAQ:SSYS), Rambus Inc. (NASDAQ:RMBS), and First Midwest Bancorp Inc (NASDAQ:FMBI) to gather more data points.
With all of this in mind, we’re going to review the new action encompassing AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG).
What does the smart money think about AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, William Leland Edwards’s Palo Alto Investors has the most valuable position in AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), worth close to $110.3 million, amounting to 5.3% of its total 13F portfolio. Coming in second is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $79.4 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers that are bullish comprise Joel Greenblatt’s Gotham Asset Management, D E Shaw and Israel Englander’s Millennium Management.
It’s worth mentioning that Jason Karp’s Tourbillon Capital Partners said goodbye to the largest investment of all the hedgies tracked by Insider Monkey, worth about $31.2 million in stock. Zach Schreiber’s fund, Point State Capital, also sold off its stock, about $20.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG). These stocks are Stratasys, Ltd. (NASDAQ:SSYS), Rambus Inc. (NASDAQ:RMBS), First Midwest Bancorp Inc (NASDAQ:FMBI), and Pennsylvania R.E.I.T. (NYSE:PEI). All of these stocks’ market caps match AMAG’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. That figure was $389 million in AMAG’s case. Stratasys, Ltd. (NASDAQ:SSYS) is the most popular stock in this table. On the other hand Pennsylvania R.E.I.T. (NYSE:PEI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) is more popular among hedge funds. 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.