We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Amicus Therapeutics, Inc. (NASDAQ:FOLD).
Amicus Therapeutics, Inc. (NASDAQ:FOLD) was in 35 hedge funds’ portfolios at the end of the fourth quarter of 2019. FOLD investors should pay attention to an increase in hedge fund sentiment of late. There were 28 hedge funds in our database with FOLD positions at the end of the previous quarter. Our calculations also showed that FOLD isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 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 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 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.
Ken Griffin of Citadel Investment Group
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when 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 review the fresh hedge fund action regarding Amicus Therapeutics, Inc. (NASDAQ:FOLD).
What does smart money think about Amicus Therapeutics, Inc. (NASDAQ:FOLD)?
Heading into the first quarter of 2020, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FOLD over the last 18 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jeremy Green’s Redmile Group has the largest position in Amicus Therapeutics, Inc. (NASDAQ:FOLD), worth close to $245.5 million, amounting to 5.9% of its total 13F portfolio. The second most bullish fund manager is Perceptive Advisors, led by Joseph Edelman, holding a $244.8 million position; the fund has 4.9% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish contain Behzad Aghazadeh’s venBio Select Advisor, William Leland Edwards’s Palo Alto Investors and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Redmile Group allocated the biggest weight to Amicus Therapeutics, Inc. (NASDAQ:FOLD), around 5.87% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, setting aside 4.86 percent of its 13F equity portfolio to FOLD.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Consonance Capital Management, managed by Mitchell Blutt, established the most valuable position in Amicus Therapeutics, Inc. (NASDAQ:FOLD). Consonance Capital Management had $4.9 million invested in the company at the end of the quarter. Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management also initiated a $4.7 million position during the quarter. The following funds were also among the new FOLD investors: Robert B. Gillam’s McKinley Capital Management, Guy Levy’s Soleus Capital, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Amicus Therapeutics, Inc. (NASDAQ:FOLD) but similarly valued. These stocks are Insight Enterprises, Inc. (NASDAQ:NSIT), Ultragenyx Pharmaceutical Inc (NASDAQ:RARE), Herman Miller, Inc. (NASDAQ:MLHR), and American Eagle Outfitters Inc. (NYSE:AEO). This group of stocks’ market caps are similar to FOLD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NSIT | 18 | 125686 | -3 |
| RARE | 18 | 210193 | -1 |
| MLHR | 24 | 213274 | -4 |
| AEO | 24 | 297377 | -5 |
| Average | 21 | 211633 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $212 million. That figure was $854 million in FOLD’s case. Herman Miller, Inc. (NASDAQ:MLHR) is the most popular stock in this table. On the other hand Insight Enterprises, Inc. (NASDAQ:NSIT) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Amicus Therapeutics, Inc. (NASDAQ:FOLD) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still managed to beat the market by 5.5 percentage points. Hedge funds were also right about betting on FOLD as the stock returned 1.5% so far in Q1 (through March 25th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
