Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. However, 63% of hedge funds’ top 30 stock picks from the index did beat the market, and returned nearly twice as much on average as the index. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Is Prothena Corporation PLC (NASDAQ:PRTA) the right investment to pursue these days? Investors who are in the know are becoming hopeful. The number of long hedge fund bets moved up by 3 lately. PRTA was in 19 hedge funds’ portfolios at the end of the third quarter of 2015. There were 16 hedge funds in our database with PRTA holdings at the end of the previous quarter. At the end of this article we will also compare PRTA to other stocks including Third Point Reinsurance Ltd (NYSE:TPRE), Avon Products, Inc. (NYSE:AVP), and Flow International Corporation (NASDAQ:FLOW) to get a better sense of its popularity.
Keeping this in mind, we’re going to take a glance at the latest action surrounding Prothena Corporation PLC (NASDAQ:PRTA).
Hedge fund activity in Prothena Corporation PLC (NASDAQ:PRTA)
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from the second quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Neil Woodford’s Woodford Investment Management has the biggest position in Prothena Corporation PLC (NASDAQ:PRTA), worth close to $281.2 million, amounting to 16.2% of its total 13F portfolio. Coming in second is Visium Asset Management, managed by Jacob Gottlieb, which holds a $43.5 million position; 0.6% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish contain Ken Griffin’s Citadel Investment Group, William Leland Edwards’ Palo Alto Investors, and Israel Englander’s Millennium Management.
Now, specific money managers have been driving this bullishness. Woodford Investment Management, managed by Neil Woodford, initiated the biggest position in Prothena Corporation PLC (NASDAQ:PRTA). Woodford Investment Management had $281.2 million invested in the company at the end of the quarter. D E Shaw also made a $1.7 million investment in the stock during the quarter. The other funds with brand new PRTA positions are Jim Simons’ Renaissance Technologies, Glenn Russell Dubin’s Highbridge Capital Management, and Ken Fisher’s Fisher Asset Management.
Let’s go over hedge fund activity in other stocks similar to Prothena Corporation PLC (NASDAQ:PRTA). We will take a look at Third Point Reinsurance Ltd (NYSE:TPRE), Avon Products, Inc. (NYSE:AVP), Flow International Corporation (NASDAQ:FLOW), and Ophthotech Corp (NASDAQ:OPHT). This group of stocks’ market caps are similar to PRTA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TPRE | 14 | 40180 | 1 |
| AVP | 30 | 246409 | 4 |
| FLOW | 24 | 172307 | 24 |
| OPHT | 18 | 270288 | -1 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $182 million. That figure was $440 million in PRTA’s case. Avon Products, Inc. (NYSE:AVP) is the most popular stock in this table. On the other hand Third Point Reinsurance Ltd (NYSE:TPRE) is the least popular one with only 14 bullish hedge fund positions. Prothena Corporation PLC (NASDAQ:PRTA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AVP might be a better candidate to consider a long position.
