Here’s What Hedge Funds Think About BeiGene, Ltd. (BGNE)

World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.

Hedge fund interest in BeiGene, Ltd. (NASDAQ:BGNE) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare BGNE to other stocks including Steel Dynamics, Inc. (NASDAQ:STLD), Tyler Technologies, Inc. (NYSE:TYL), and Kimco Realty Corp (NYSE:KIM) to get a better sense of its popularity.

According to most shareholders, hedge funds are seen as underperforming, outdated investment tools of yesteryear. While there are greater than 8000 funds trading today, Our experts choose to focus on the moguls of this club, approximately 750 funds. It is estimated that this group of investors preside over the majority of all hedge funds’ total asset base, and by paying attention to their inimitable equity investments, Insider Monkey has brought to light a number of investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).

Samuel Isaly Orbimed Advisors

We’re going to take a look at the fresh hedge fund action regarding BeiGene, Ltd. (NASDAQ:BGNE).

What does smart money think about BeiGene, Ltd. (NASDAQ:BGNE)?

At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in BGNE a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).


Among these funds, Baker Bros. Advisors held the most valuable stake in BeiGene, Ltd. (NASDAQ:BGNE), which was worth $1578.7 million at the end of the first quarter. On the second spot was Hillhouse Capital Management which amassed $136.5 million worth of shares. Moreover, OrbiMed Advisors, Rock Springs Capital Management, and Polar Capital were also bullish on BeiGene, Ltd. (NASDAQ:BGNE), allocating a large percentage of their portfolios to this stock.

Because BeiGene, Ltd. (NASDAQ:BGNE) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few hedge funds who sold off their positions entirely heading into Q3. Intriguingly, David Kowitz and Sheldon Kasowitz’s Indus Capital cut the biggest position of the 700 funds tracked by Insider Monkey, totaling close to $19.4 million in stock. D. E. Shaw’s fund, D E Shaw, also dropped its stock, about $0.7 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as BeiGene, Ltd. (NASDAQ:BGNE) but similarly valued. We will take a look at Steel Dynamics, Inc. (NASDAQ:STLD), Tyler Technologies, Inc. (NYSE:TYL), Kimco Realty Corp (NYSE:KIM), and Omega Healthcare Investors Inc (NYSE:OHI). All of these stocks’ market caps match BGNE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
STLD 27 405696 -3
TYL 31 697752 7
KIM 11 71725 -5
OHI 13 242355 2
Average 20.5 354382 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $354 million. That figure was $1823 million in BGNE’s case. Tyler Technologies, Inc. (NYSE:TYL) is the most popular stock in this table. On the other hand Kimco Realty Corp (NYSE:KIM) is the least popular one with only 11 bullish hedge fund positions. BeiGene, Ltd. (NASDAQ:BGNE) 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. 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 BGNE wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BGNE investors were disappointed as the stock returned -9.2% during the same time 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 so far in Q2.

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