How Concert Pharmaceuticals Inc (CNCE) Stacks Up Against Its Peers

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Concert Pharmaceuticals Inc (NASDAQ:CNCE).

Concert Pharmaceuticals Inc (NASDAQ:CNCE) was in 16 hedge funds’ portfolios at the end of the third quarter of 2016. CNCE investors should pay attention to an increase in activity from the world’s largest hedge funds recently. There were 13 hedge funds in our database with CNCE holdings at the end of the previous quarter. At the end of this article we will also compare CNCE to other stocks including Titan Machinery Inc. (NASDAQ:TITN), Utah Medical Products, Inc. (NASDAQ:UTMD), and Merchants Bancshares,Inc. (NASDAQ:MBVT) to get a better sense of its popularity.

We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

What does the smart money think about Concert Pharmaceuticals Inc (NASDAQ:CNCE)?

Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 23% from the second quarter of 2016. On the other hand, there were a total of 9 hedge funds with a bullish position in CNCE at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Mark Lampert’s Biotechnology Value Fund / BVF Inc has the most valuable position in Concert Pharmaceuticals Inc (NASDAQ:CNCE), worth close to $27.5 million, accounting for 5.2% of its total 13F portfolio. The second largest stake is held by Point72 Asset Management, led by Steve Cohen, which holds a $4.2 million position. Other hedge funds and institutional investors that hold long positions include Renaissance Technologies, one of the largest hedge funds in the world, and Julian Baker and Felix Baker’s Baker Bros. Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Alyeska Investment Group, led by Anand Parekh, established the most outsized position in Concert Pharmaceuticals Inc (NASDAQ:CNCE). Alyeska Investment Group had $3.3 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Glenn Russell Dubin’s Highbridge Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Concert Pharmaceuticals Inc (NASDAQ:CNCE). These stocks are Titan Machinery Inc. (NASDAQ:TITN), Utah Medical Products, Inc. (NASDAQ:UTMD), Merchants Bancshares,Inc. (NASDAQ:MBVT), and Hudson Technologies, Inc. (NASDAQ:HDSN). This group of stocks’ market valuations are closest to CNCE’s market valuation.

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $47 million in CNCE’s case. Hudson Technologies, Inc. (NASDAQ:HDSN) is the most popular stock in this table. On the other hand Merchants Bancshares,Inc. (NASDAQ:MBVT) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Concert Pharmaceuticals Inc (NASDAQ:CNCE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None