After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Intercept Pharmaceuticals Inc (NASDAQ:ICPT).
Is Intercept Pharmaceuticals Inc (NASDAQ:ICPT) going to take off soon? The smart money is in a bearish mood. The number of long hedge fund bets decreased by 6 lately. ICPT was in 18 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with ICPT holdings at the end of the previous quarter. At the end of this article we will also compare ICPT to other stocks including Zebra Technologies Corp. (NASDAQ:ZBRA), Echostar Corporation (NASDAQ:SATS), and Reliance Steel & Aluminum (NYSE:RS) to get a better sense of its popularity.
In the eyes of most investors, hedge funds are perceived as slow, outdated investment tools of years past. While there are over 8000 funds with their doors open at the moment, our researchers choose to focus on the top tier of this group, about 700 funds. Most estimates calculate that this group of people handle the majority of the hedge fund industry’s total capital, and by observing their first-class investments, Insider Monkey has determined many investment strategies that have historically outpaced the broader indices. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Now, let’s take a gander at the new action regarding Intercept Pharmaceuticals Inc (NASDAQ:ICPT).
How have hedgies been trading Intercept Pharmaceuticals Inc (NASDAQ:ICPT)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Samuel Isaly’s OrbiMed Advisors has the most valuable position in Intercept Pharmaceuticals Inc (NASDAQ:ICPT), worth close to $185,8 million, amounting to 1,9% of its total 13F portfolio. On OrbiMed Advisors’s heels is Columbus Circle Investors, with a $44,2 million position; 0,4% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish encompass Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Jonathon Jacobson’s Highfields Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management.
Because Intercept Pharmaceuticals Inc (NASDAQ:ICPT) has witnessed falling interest from the smart money, logic holds that there was a specific group of fund managers who were dropping their entire stakes heading into Q4. Intriguingly, Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital cut the biggest investment of all the hedgies watched by Insider Monkey, worth close to $39,5 million in stock, and Thomas Steyer of Farallon Capital was right behind this move, as the fund cut about $22 million worth. These moves are interesting, as aggregate hedge fund interest fell by 6 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Intercept Pharmaceuticals Inc (NASDAQ:ICPT). We will take a look at Zebra Technologies Corp. (NASDAQ:ZBRA), Echostar Corporation (NASDAQ:SATS), Reliance Steel & Aluminum (NYSE:RS), and Tesoro Logistics LP (NYSE:TLLP). This group of stocks’ market valuations resemble ICPT’s market valuation.
|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 22,75 hedge funds with bullish positions and the average amount invested in these stocks was $389 million.That figure was $345 million in ICPT’s case. Zebra Technologies Corp. (NASDAQ:ZBRA) is the most popular stock in this table. On the other hand Tesoro Logistics LP (NYSE:TLLP) is the least popular one with only 9 bullish hedge fund positions. Intercept Pharmaceuticals Inc (NASDAQ:ICPT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ZBRA might be a better candidate to consider a long position.