Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG).
AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) was in 19 hedge funds’ portfolios at the end of March. AMAG has seen a decrease in hedge fund interest lately. There were 23 hedge funds in our database with AMAG positions at the end of the previous quarter. Our calculations also showed that AMAG isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a glance at the recent hedge fund action encompassing AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG).
How are hedge funds trading AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMAG over the last 15 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Palo Alto Investors held the most valuable stake in AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), which was worth $44.1 million at the end of the first quarter. On the second spot was Armistice Capital which amassed $42.7 million worth of shares. Moreover, Camber Capital Management, Renaissance Technologies, and D E Shaw were also bullish on AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), allocating a large percentage of their portfolios to this stock.
Since AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedge funds who were dropping their full holdings heading into Q3. Interestingly, Jeffrey Jay and David Kroin’s Great Point Partners cut the largest investment of all the hedgies tracked by Insider Monkey, totaling close to $10.1 million in stock. Jonathan Berger’s fund, Birch Grove Capital, also cut its stock, about $7.2 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds heading into Q3.
Let’s also examine hedge fund activity in other stocks similar to AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG). These stocks are Sierra Wireless, Inc. (NASDAQ:SWIR), B. Riley Financial, Inc. (NASDAQ:RILY), Greenhill & Co., Inc. (NYSE:GHL), and Priority Technology Holdings, Inc. (NASDAQ:PRTH). All of these stocks’ market caps resemble AMAG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SWIR | 12 | 50988 | 2 |
| RILY | 10 | 84819 | 0 |
| GHL | 15 | 40189 | 2 |
| PRTH | 2 | 4360 | -1 |
| Average | 9.75 | 45089 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $186 million in AMAG’s case. Greenhill & Co., Inc. (NYSE:GHL) is the most popular stock in this table. On the other hand Priority Technology Holdings, Inc. (NASDAQ:PRTH) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately AMAG wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on AMAG were disappointed as the stock returned -31.8% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
