As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Amicus Therapeutics, Inc. (NASDAQ:FOLD).
Amicus Therapeutics, Inc. (NASDAQ:FOLD) was in 30 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. FOLD has seen a decrease in support from the world’s most elite money managers lately. There were 37 hedge funds in our database with FOLD positions at the end of the fourth quarter. Our calculations also showed that FOLD isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 look at the latest hedge fund action regarding Amicus Therapeutics, Inc. (NASDAQ:FOLD).
Do Hedge Funds Think FOLD Is A Good Stock To Buy Now?
At first quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in FOLD over the last 23 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Among these funds, Perceptive Advisors held the most valuable stake in Amicus Therapeutics, Inc. (NASDAQ:FOLD), which was worth $225.9 million at the end of the fourth quarter. On the second spot was Redmile Group which amassed $208.6 million worth of shares. Avoro Capital Advisors (venBio Select Advisor), Palo Alto Investors, and D E Shaw 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 Palo Alto Investors allocated the biggest weight to Amicus Therapeutics, Inc. (NASDAQ:FOLD), around 5.49% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, setting aside 2.94 percent of its 13F equity portfolio to FOLD.
Since Amicus Therapeutics, Inc. (NASDAQ:FOLD) has experienced a decline in interest from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds who were dropping their full holdings last quarter. Interestingly, Lone Pine Capital sold off the largest investment of the 750 funds followed by Insider Monkey, comprising an estimated $154.2 million in stock, and McKinley Capital Management was right behind this move, as the fund cut about $9.3 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 7 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Amicus Therapeutics, Inc. (NASDAQ:FOLD) but similarly valued. These stocks are BRP Group, Inc. (NASDAQ:BRP), Cimpress plc (NASDAQ:CMPR), Mimecast Limited (NASDAQ:MIME), Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), MGE Energy, Inc. (NASDAQ:MGEE), Cadence Bancorporation (NYSE:CADE), and Winnebago Industries, Inc. (NYSE:WGO). This group of stocks’ market caps match FOLD’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $258 million. That figure was $785 million in FOLD’s case. Winnebago Industries, Inc. (NYSE:WGO) is the most popular stock in this table. On the other hand MGE Energy, Inc. (NASDAQ:MGEE) is the least popular one with only 8 bullish hedge fund positions. Amicus Therapeutics, Inc. (NASDAQ:FOLD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FOLD is 71.7. 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 FOLD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FOLD were disappointed as the stock returned -1.9% 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.