The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Incyte Corporation (NASDAQ:INCY) based on those filings.
Is Incyte Corporation (NASDAQ:INCY) a good investment now? Hedge funds were in a bearish mood. The number of bullish hedge fund positions dropped by 5 in recent months. Incyte Corporation (NASDAQ:INCY) was in 32 hedge funds’ portfolios at the end of March. The all time high for this statistic is 53. Our calculations also showed that INCY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 37 hedge funds in our database with INCY positions at the end of the fourth quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
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 let’s take a gander at the key hedge fund action encompassing Incyte Corporation (NASDAQ:INCY).
Do Hedge Funds Think INCY Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards INCY over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Julian Baker and Felix Baker’s Baker Bros. Advisors has the number one position in Incyte Corporation (NASDAQ:INCY), worth close to $2.6008 billion, accounting for 11.3% of its total 13F portfolio. On Baker Bros. Advisors’s heels is Renaissance Technologies, which holds a $398.1 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions contain Catherine D. Wood’s ARK Investment Management, Arthur B Cohen and Joseph Healey’s Healthcor Management LP and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Baker Bros. Advisors allocated the biggest weight to Incyte Corporation (NASDAQ:INCY), around 11.28% of its 13F portfolio. Healthcor Management LP is also relatively very bullish on the stock, earmarking 3.29 percent of its 13F equity portfolio to INCY.
Since Incyte Corporation (NASDAQ:INCY) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds that decided to sell off their entire stakes heading into Q2. It’s worth mentioning that Steve Cohen’s Point72 Asset Management said goodbye to the biggest investment of the 750 funds tracked by Insider Monkey, totaling about $42.4 million in stock. Roberto Mignone’s fund, Bridger Management, also sold off its stock, about $35.2 million worth. These moves are interesting, as total hedge fund interest was cut by 5 funds heading into Q2.
Let’s now review hedge fund activity in other stocks similar to Incyte Corporation (NASDAQ:INCY). We will take a look at Cardinal Health, Inc. (NYSE:CAH), Huazhu Group Limited (NASDAQ:HTHT), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Imperial Oil Limited (NYSE:IMO), Broadridge Financial Solutions, Inc. (NYSE:BR), Seagate Technology Holdings plc (NASDAQ:STX), and CMS Energy Corporation (NYSE:CMS). All of these stocks’ market caps match INCY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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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 $746 million. That figure was $3852 million in INCY’s case. Cardinal Health, Inc. (NYSE:CAH) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 13 bullish hedge fund positions. Incyte Corporation (NASDAQ:INCY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INCY is 54.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately INCY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on INCY were disappointed as the stock returned 2.8% since the end of March (through 7/2) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.