Hedge Funds Never Been Less Bullish On Neurocrine Biosciences, Inc. (NBIX)

We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Neurocrine Biosciences, Inc. (NASDAQ:NBIX) based on that data.

Neurocrine Biosciences, Inc. (NASDAQ:NBIX) was in 19 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 45. NBIX investors should be aware of a decrease in support from the world’s most elite money managers in recent months. There were 31 hedge funds in our database with NBIX holdings at the end of December. Our calculations also showed that NBIX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you’d ask most market participants, hedge funds are perceived as slow, outdated financial tools of the past. While there are greater than 8000 funds in operation today, Our researchers look at the leaders of this group, around 850 funds. These money managers direct the majority of the hedge fund industry’s total capital, and by tracking their unrivaled equity investments, Insider Monkey has discovered a number of investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Kris Jenner - Rock Springs Capital

Kris Jenner of Rock Springs Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 surrounding Neurocrine Biosciences, Inc. (NASDAQ:NBIX).

Do Hedge Funds Think NBIX Is A Good Stock To Buy Now?

At the end of March, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -39% from the fourth quarter of 2020. On the other hand, there were a total of 38 hedge funds with a bullish position in NBIX a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of Neurocrine Biosciences, Inc. (NASDAQ:NBIX), with a stake worth $135.9 million reported as of the end of March. Trailing Renaissance Technologies was OrbiMed Advisors, which amassed a stake valued at $126.6 million. Citadel Investment Group, Partner Fund Management, and Rock Springs Capital Management 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 4.63% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, designating 3.13 percent of its 13F equity portfolio to NBIX.

Since Neurocrine Biosciences, Inc. (NASDAQ:NBIX) has experienced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers that elected to cut their full holdings in the first quarter. At the top of the heap, Arthur B Cohen and Joseph Healey’s Healthcor Management LP dumped the largest position of all the hedgies tracked by Insider Monkey, totaling close to $21.7 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $21.6 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 12 funds in the first quarter.

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 ImmunityBio, Inc. (NASDAQ:IBRX), Axon Enterprise, Inc. (NASDAQ:AXON), Sasol Limited (NYSE:SSL), Kirkland Lake Gold Ltd. (NYSE:KL), AGNC Investment Corp. (NASDAQ:AGNC), Ralph Lauren Corporation (NYSE:RL), and Nielsen Holdings plc (NYSE:NLSN). All of these stocks’ market caps match NBIX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IBRX 6 8021 3
AXON 31 410366 -1
SSL 7 63240 -3
KL 25 401139 1
AGNC 18 167634 -7
RL 34 955242 -1
NLSN 34 1981675 0
Average 22.1 569617 -1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $570 million. That figure was $883 million in NBIX’s case. Ralph Lauren Corporation (NYSE:RL) is the most popular stock in this table. On the other hand ImmunityBio, Inc. (NASDAQ:IBRX) is the least popular one with only 6 bullish hedge fund positions. Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NBIX is 28.9. 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 negative signal and 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately NBIX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); NBIX investors were disappointed as the stock returned -2.3% since the end of March (through 7/16) 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 in 2021.

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