As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Dyax Corp. (NASDAQ:DYAX) in this article.
Dyax Corp. investors should be aware of a decrease in hedge fund sentiment lately. 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 G-III Apparel Group, Ltd. (NASDAQ:GIII), Mercury General Corporation (NYSE:MCY), and Deluxe Corporation (NYSE:DLX) to gather more data points.
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In the eyes of most market participants, hedge funds are assumed to be slow, old financial vehicles of years past. While there are more than 8000 funds with their doors open today, Our researchers look at the moguls of this group, about 700 funds. These investment experts manage most of all hedge funds’ total capital, and by paying attention to their highest performing stock picks, Insider Monkey has figured out numerous investment strategies that have historically defeated the market. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, we’re going to take a look at the fresh action encompassing Dyax Corp. (NASDAQ:DYAX).
Hedge fund activity in Dyax Corp. (NASDAQ:DYAX)
At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the largest position in Dyax Corp. (NASDAQ:DYAX). Baker Bros. Advisors has a $144.3 million position in the stock, comprising 1.3% of its 13F portfolio. On Baker Bros. Advisors’s heels is D E Shaw, which holds a $65.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of James E. Flynn’s Deerfield Management, Peter Kolchinsky’s RA Capital Management and Joseph Edelman’s Perceptive Advisors.
Due to the fact that Dyax Corp. (NASDAQ:DYAX) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds who sold off their entire stakes heading into Q4. Interestingly, Jacob Gottlieb’s Visium Asset Management cut the biggest position of the 700 funds watched by Insider Monkey, valued at about $11.1 million in stock. Eric Bannasch’s fund, Cadian Capital, also dumped its stock, about $2.7 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Dyax Corp. (NASDAQ:DYAX) but similarly valued. These stocks are G-III Apparel Group, Ltd. (NASDAQ:GIII), Mercury General Corporation (NYSE:MCY), Deluxe Corporation (NYSE:DLX), and Emcor Group Inc (NYSE:EME). All of these stocks’ market caps match DYAX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GIII | 18 | 177738 | -1 |
| MCY | 8 | 17969 | 0 |
| DLX | 25 | 148096 | 0 |
| EME | 23 | 229515 | 3 |
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $513 million in DYAX’s case. Deluxe Corporation (NYSE:DLX) is the most popular stock in this table. On the other hand Mercury General Corporation (NYSE:MCY) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Dyax Corp. (NASDAQ:DYAX) 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.
