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Hedge Funds Are Betting On Insys Therapeutics Inc (INSY)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Insys Therapeutics Inc (NASDAQ:INSY).

Insys Therapeutics Inc (NASDAQ:INSY) investors should be aware of an increase in support from the world’s most successful money managers lately. There were 22 hedge funds in our database with INSY holdings at the end of September. At the end of this article we will also compare INSY to other stocks including Fifth Street Finance Corp. (NASDAQ:FSC), Southside Bancshares, Inc. (NASDAQ:SBSI), and State Bank Financial Corp (NASDAQ:STBZ) to get a better sense of its popularity.

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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

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Hedge fund activity in Insys Therapeutics Inc (NASDAQ:INSY)

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 29% from one quarter earlier. By comparison, 20 hedge funds held shares or bullish call options in INSY heading into this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

INSY Chart

Of the funds tracked by Insider Monkey, Scopia Capital, led by Matt Sirovich and Jeremy Mindich, holds the largest position in Insys Therapeutics Inc (NASDAQ:INSY). Scopia Capital has a $107.6 million position in the stock, comprising 1.9% of its 13F portfolio. On Scopia Capital’s heels is OrbiMed Advisors, led by Samuel Isaly, which holds a $64.9 million position. Some other members of the smart money with similar optimism comprise Solomon Kumin’s Folger Hill Asset Management, and Michael Doheny’s Freshford Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, some big names have jumped into Insys Therapeutics Inc (NASDAQ:INSY) headfirst. Citadel Investment Group, led by Ken Griffin, initiated the most valuable position in Insys Therapeutics Inc (NASDAQ:INSY). Citadel Investment Group had $4.6 million invested in the company at the end of the quarter. Michael Doheny’s Freshford Capital Management also initiated a $4.5 million position during the quarter. The other funds with brand new INSY positions are Steve Cohen’s Point72 Asset Management, Lee Ainslie’s Maverick Capital, and Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks similar to Insys Therapeutics Inc (NASDAQ:INSY). These stocks are Fifth Street Finance Corp. (NASDAQ:FSC), Southside Bancshares, Inc. (NASDAQ:SBSI), State Bank Financial Corp (NASDAQ:STBZ), and Vascular Solutions, Inc. (NASDAQ:VASC). All of these stocks’ market caps match INSY’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FSC 11 15348 0
SBSI 6 33580 0
STBZ 12 99121 0
VASC 10 43905 2

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $222 million in INSY’s case. State Bank Financial Corp (NASDAQ:STBZ) is the most popular stock in this table. On the other hand Southside Bancshares, Inc. (NASDAQ:SBSI) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Insys Therapeutics Inc (NASDAQ:INSY) 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.

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