Is Neurocrine Biosciences, Inc. (NASDAQ:NBIX) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Neurocrine Biosciences, Inc. (NASDAQ:NBIX) was in 32 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 45. NBIX has experienced an increase in support from the world’s most elite money managers recently. There were 19 hedge funds in our database with NBIX holdings at the end of March. Our calculations also showed that NBIX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to analyze the recent hedge fund action regarding Neurocrine Biosciences, Inc. (NASDAQ:NBIX).
Do Hedge Funds Think NBIX Is A Good Stock To Buy Now?
At the end of June, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 68% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NBIX over the last 24 quarters. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Neurocrine Biosciences, Inc. (NASDAQ:NBIX), with a stake worth $120.9 million reported as of the end of June. Trailing Renaissance Technologies was OrbiMed Advisors, which amassed a stake valued at $119.8 million. Partner Fund Management, Rock Springs Capital Management, and Perceptive Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Birchview Capital allocated the biggest weight to Neurocrine Biosciences, Inc. (NASDAQ:NBIX), around 4.67% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, earmarking 3.4 percent of its 13F equity portfolio to NBIX.
As industrywide interest jumped, some big names were breaking ground themselves. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, created the most valuable position in Neurocrine Biosciences, Inc. (NASDAQ:NBIX). Healthcor Management LP had $38 million invested in the company at the end of the quarter. Michael Rockefeller and KarláKroeker’s Woodline Partners also initiated a $37.5 million position during the quarter. The following funds were also among the new NBIX investors: Warren Lammert’s Granite Point Capital, Israel Englander’s Millennium Management, and Michael Gelband’s ExodusPoint Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Neurocrine Biosciences, Inc. (NASDAQ:NBIX) but similarly valued. These stocks are Albertsons Companies, Inc. (NYSE:ACI), Sensata Technologies Holding plc (NYSE:ST), Federal Realty Investment Trust (NYSE:FRT), Algonquin Power & Utilities Corp. (NYSE:AQN), BridgeBio Pharma, Inc. (NASDAQ:BBIO), CAE, Inc. (NYSE:CAE), and Smartsheet Inc. (NYSE:SMAR). This group of stocks’ market values resemble NBIX’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.4 hedge funds with bullish positions and the average amount invested in these stocks was $1358 million. That figure was $900 million in NBIX’s case. Smartsheet Inc. (NYSE:SMAR) is the most popular stock in this table. On the other hand CAE, Inc. (NYSE:CAE) is the least popular one with only 10 bullish hedge fund positions. Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NBIX is 59.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on NBIX as the stock returned 7.4% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.