Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Pacira Biosciences Inc (NASDAQ:PCRX) to find out whether there were any major changes in hedge funds’ views.
Pacira Biosciences Inc (NASDAQ:PCRX) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 31. PCRX investors should be aware of an increase in enthusiasm from smart money lately. There were 23 hedge funds in our database with PCRX positions at the end of the second quarter. Our calculations also showed that PCRX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
James E. Flynn of Deerfield Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s view the key hedge fund action encompassing Pacira Biosciences Inc (NASDAQ:PCRX).
Do Hedge Funds Think PCRX Is A Good Stock To Buy Now?
At third quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PCRX over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Pacira Biosciences Inc (NASDAQ:PCRX) was held by Renaissance Technologies, which reported holding $110.3 million worth of stock at the end of September. It was followed by Paulson & Co with a $70.5 million position. Other investors bullish on the company included Rock Springs Capital Management, Deerfield Management, and Armistice Capital. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to Pacira Biosciences Inc (NASDAQ:PCRX), around 6.63% of its 13F portfolio. Paulson & Co is also relatively very bullish on the stock, earmarking 2.01 percent of its 13F equity portfolio to PCRX.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Armistice Capital, managed by Steven Boyd, initiated the most valuable position in Pacira Biosciences Inc (NASDAQ:PCRX). Armistice Capital had $52.4 million invested in the company at the end of the quarter. Guy Levy’s Soleus Capital also initiated a $3.7 million position during the quarter. The following funds were also among the new PCRX investors: Paul Tudor Jones’s Tudor Investment Corp, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pacira Biosciences Inc (NASDAQ:PCRX) but similarly valued. These stocks are Arcus Biosciences, Inc. (NYSE:RCUS), Albany International Corp. (NYSE:AIN), 21Vianet Group Inc (NASDAQ:VNET), Opko Health Inc. (NYSE:OPK), SkyWest, Inc. (NASDAQ:SKYW), Cassava Sciences, Inc. (NASDAQ:SAVA), and Array Biopharma Inc (NASDAQ:ARRY). This group of stocks’ market caps match PCRX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RCUS | 21 | 573893 | -1 |
| AIN | 17 | 38508 | 5 |
| VNET | 16 | 173326 | -7 |
| OPK | 12 | 19201 | -6 |
| SKYW | 14 | 36968 | 0 |
| SAVA | 10 | 34243 | -3 |
| ARRY | 14 | 88667 | -4 |
| Average | 14.9 | 137829 | -2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $426 million in PCRX’s case. Arcus Biosciences, Inc. (NYSE:RCUS) is the most popular stock in this table. On the other hand Cassava Sciences, Inc. (NASDAQ:SAVA) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Pacira Biosciences Inc (NASDAQ:PCRX) is more popular among hedge funds. Our overall hedge fund sentiment score for PCRX is 79.2. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately PCRX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PCRX were disappointed as the stock returned 0.5% since the end of the third quarter (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Pacira Biosciences Inc. (NASDAQ:PCRX)
Follow Pacira Biosciences Inc. (NASDAQ:PCRX)
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Disclosure: None. This article was originally published at Insider Monkey.
