“Market conditions are changing. The continued rise in interest rates suggests we are in the early stages of a bond bear market, which could intensify as central banks withdraw liquidity. The receding tide of liquidity will start to reveal more rocks beyond what has been exposed in emerging markets so far, and the value of a value discipline will be in avoiding the biggest capital-destroying rocks. If a rock emerges on the crowded shore of U.S. momentum, it could result in a major liquidity challenge, as momentum is often most intense on the downside as a crowded trade reverses. So investors are facing a large potential trade-off right now: continue to bet on the current dominance of momentum and the S&P 500, or bet on change and take an active value bet in names with attractive value and optionality, but with negative momentum,” said Clearbridge Investments in its market commentary. We aren’t sure whether long-term interest rates will top 5% and value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards PTC Therapeutics, Inc. (NASDAQ:PTCT).
Is PTC Therapeutics, Inc. (NASDAQ:PTCT) a healthy stock for your portfolio? Money managers are in a pessimistic mood. The number of long hedge fund positions dropped by 5 lately. Our calculations also showed that PTCT isn’t among the 30 most popular stocks among hedge funds. PTCT was in 25 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 30 hedge funds in our database with PTCT positions at the end of the previous quarter.
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Let’s review the new hedge fund action surrounding PTC Therapeutics, Inc. (NASDAQ:PTCT).
How are hedge funds trading PTC Therapeutics, Inc. (NASDAQ:PTCT)?
At the end of the fourth quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PTCT over the last 14 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in PTC Therapeutics, Inc. (NASDAQ:PTCT), which was worth $61.1 million at the end of the fourth quarter. On the second spot was Scopia Capital which amassed $55.8 million worth of shares. Moreover, OrbiMed Advisors, Point72 Asset Management, and Great Point Partners were also bullish on PTC Therapeutics, Inc. (NASDAQ:PTCT), allocating a large percentage of their portfolios to this stock.
Judging by the fact that PTC Therapeutics, Inc. (NASDAQ:PTCT) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers that decided to sell off their full holdings heading into Q3. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest investment of all the hedgies followed by Insider Monkey, worth about $32.9 million in stock, and Ken Greenberg and David Kim’s Ghost Tree Capital was right behind this move, as the fund dropped about $23.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as PTC Therapeutics, Inc. (NASDAQ:PTCT) but similarly valued. We will take a look at Steelcase Inc. (NYSE:SCS), Apptio, Inc. (NASDAQ:APTI), Switch, Inc. (NYSE:SWCH), and Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY). This group of stocks’ market values match PTCT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SCS | 22 | 83481 | 3 |
| APTI | 22 | 387162 | -3 |
| SWCH | 14 | 107175 | 2 |
| PLAY | 22 | 230987 | 0 |
| Average | 20 | 202201 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $202 million. That figure was $435 million in PTCT’s case. Steelcase Inc. (NYSE:SCS) is the most popular stock in this table. On the other hand Switch, Inc. (NYSE:SWCH) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks PTC Therapeutics, Inc. (NASDAQ:PTCT) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately PTCT wasn’t nearly as popular as these 15 stock and hedge funds that were betting on PTCT were disappointed as the stock returned 5.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
