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Hedge Funds Aren’t Done Buying Regeneron Pharmaceuticals Inc (REGN)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Regeneron Pharmaceuticals Inc (NASDAQ:REGN).

Regeneron Pharmaceuticals Inc (NASDAQ:REGN) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that REGN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Roberto Mignone of Bridger Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s analyze the key hedge fund action surrounding Regeneron Pharmaceuticals Inc (NASDAQ:REGN).

What does smart money think about Regeneron Pharmaceuticals Inc (NASDAQ:REGN)?

At Q1’s end, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in REGN a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

The largest stake in Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was held by Renaissance Technologies, which reported holding $238 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $185.8 million position. Other investors bullish on the company included AQR Capital Management, PEAK6 Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position Bridger Management allocated the biggest weight to Regeneron Pharmaceuticals Inc (NASDAQ:REGN), around 5.19% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, designating 1.93 percent of its 13F equity portfolio to REGN.

As aggregate interest increased, some big names have been driving this bullishness. Bridger Management, managed by Roberto Mignone, assembled the biggest position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN). Bridger Management had $44.8 million invested in the company at the end of the quarter. Joseph Edelman’s Perceptive Advisors also initiated a $39.1 million position during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson’s Adage Capital Management, Glen Kacher’s Light Street Capital, and Michael Rockefeller and KarláKroeker’s Woodline Partners.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Regeneron Pharmaceuticals Inc (NASDAQ:REGN) but similarly valued. These stocks are Equinix , Inc. (REIT) (NASDAQ:EQIX), Advanced Micro Devices, Inc. (NASDAQ:AMD), The Goldman Sachs Group, Inc. (NYSE:GS), and U.S. Bancorp (NYSE:USB). All of these stocks’ market caps match REGN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EQIX 55 1950326 12
AMD 62 2087092 9
GS 74 3084948 -1
USB 51 5625919 1
Average 60.5 3187071 5.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 60.5 hedge funds with bullish positions and the average amount invested in these stocks was $3187 million. That figure was $838 million in REGN’s case. The Goldman Sachs Group, Inc. (NYSE:GS) is the most popular stock in this table. On the other hand U.S. Bancorp (NYSE:USB) is the least popular one with only 51 bullish hedge fund positions. Compared to these stocks Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is even less popular than USB. Hedge funds clearly dropped the ball on REGN as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on REGN as the stock returned 25.5% so far in the second quarter and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.