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Eagle Pharmaceuticals (EGRX) Has Fallen 38% in Last One Year, Underperforms Market

If you are looking for the best ideas for your portfolio you may want to consider some of Summers Value Partners top stock picks. Summers Value Partners, an investment management firm, is bullish on Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) stock. Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) is a specialty pharmaceutical company.

In July 2019, Summers Value Partners had released its Q2 2019 investor letter. Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) stock has posted a return of -38.4% in the trailing one year period, underperforming fund’s benchmark the S&P 500 Index which returned 13.1% in the same period. This suggests that the investment firm was wrong in its decision. On a year-to-date basis, Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) stock has fallen by 38.6%.

Summers Value Partners fund posted a return of 1.2% in the second quarter of 2019, underperforming fund’s benchmark the S&P 500 Index which returned 4.30% in the same period. Let’s take a look at comments made by Summers Value Partners about Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) stock in the Q2 2019 investor letter.

“Eagle Pharmaceuticals was a top contributor in the year-to-date period. In April, the company announced a positive change to the terms of its Bendeka license agreement with Teva Pharmaceuticals (TEVA). The important changes to the agreement included extending its duration to when the product is last commercially sold from the previous end date of 2025 and increasing the royalty rate from 25% to 30% beginning in October of this year. We view the license agreement changes as material positive events as they should lead to an improved cash flow outlook for the company. Eagle has a number of upcoming pipeline readouts (regulatory and clinical), which shareholders should learn about in the near-term. We would view any pipeline success favorably given the pipeline setbacks experienced in recent years. In the background, the company continues to repurchase shares and has now repurchased almost 3 million shares since 2016 or 18% of the share count. Eagle ended the first quarter with $60 million of net cash on the balance sheet and should continue to be a strong cash generator going forward. Despite the yearto-date performance, Eagle trades at only 11.5x our estimate of 2020 earnings per share.”

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In Q1 2020, the number of bullish hedge fund positions on Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Eagle Pharmaceuticals’ growth potential. Our calculations showed that Eagle Pharmaceuticals Inc. (NASDAQ:EGRX) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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