The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Vanda Pharmaceuticals Inc. (NASDAQ:VNDA).
Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) was in 24 hedge funds’ portfolios at the end of the third quarter of 2016. VNDA has experienced an increase in activity from the world’s largest hedge funds recently. There were 21 hedge funds in our database with VNDA positions at the end of the previous quarter. 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 Live Oak Bancshares Inc (NASDAQ:LOB), Barnes & Noble Education Inc (NYSE:BNED), and Albany Molecular Research, Inc. (NASDAQ:AMRI) to gather more data points.
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What have hedge funds been doing with Vanda Pharmaceuticals Inc. (NASDAQ:VNDA)?
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 14% rise from the second quarter of 2016. Overall, hedge fund ownership of Vanda has remained in a narrow range of between 21 and 24 hedge funds over the past five quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, William Leland Edwards’s Palo Alto Investors has the biggest position in Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), worth close to $68.4 million, amounting to 4% of its total 13F portfolio. Sitting at the No. 2 spot is Deerfield Management, led by James E. Flynn, holding a $57.2 million position; 2.7% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions comprise Jeffrey Jay and David Kroin’s Great Point Partners, John Paulson’s Paulson & Co and Israel Englander’s Millennium Management.
Now, key money managers were leading the bulls’ herd. OrbiMed Advisors, managed by Samuel Isaly, assembled the most valuable call position in Vanda Pharmaceuticals Inc. (NASDAQ:VNDA). OrbiMed Advisors had $12.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $9 million position during the quarter. The following funds were also among the new VNDA investors: Ken Greenberg and David Kim’s Ghost Tree Capital, Glenn Russell Dubin’s Highbridge Capital Management, and Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) but similarly valued. We will take a look at Live Oak Bancshares Inc (NASDAQ:LOB), Barnes & Noble Education Inc (NYSE:BNED), Albany Molecular Research, Inc. (NASDAQ:AMRI), and Greenhill & Co., Inc. (NYSE:GHL). All of these stocks’ market caps match VNDA’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 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $321 million in VNDA’s case. Greenhill & Co., Inc. (NYSE:GHL) is the most popular stock in this table. On the other hand Live Oak Bancshares Inc (NASDAQ:LOB) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and growing fonder of it still, it may be a good idea to analyze it in detail and potentially include it in your portfolio.