Is Amgen, Inc. (AMGN) A Good Stock To Buy Now?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. The second half of 2015 and the first few months of this year was a stressful period for hedge funds. However, things have been taking a turn for the better in the second half of this year. Small-cap stocks which hedge funds are usually overweight outperformed the market by double digits and it may be a good time to pay attention to hedge funds’ picks before it is too late. In this article we are going to analyze the hedge fund sentiment towards Amgen, Inc. (NASDAQ:AMGN).

Amgen, Inc. (NASDAQ:AMGN) investors should be aware of an increase in enthusiasm from smart money recently. AMGN was in 59 hedge funds’ portfolios at the end of September. There were 58 hedge funds in our database with AMGN positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as TOTAL S.A. (ADR) (NYSE:TOT), Gilead Sciences, Inc. (NASDAQ:GILD), and BP plc (ADR) (NYSE:BP) to gather more data points.

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What have hedge funds been doing with Amgen, Inc. (NASDAQ:AMGN)?

At the end of the third quarter, a total of 59 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 2% rise from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Samuel Isaly’s OrbiMed Advisors has the number one position in Amgen, Inc. (NASDAQ:AMGN), worth close to $406.5 million, accounting for 4.6% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $316.3 million position. Other members of the smart money that are bullish consist of Cliff Asness’ AQR Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and D E Shaw.

As one would reasonably expect, some big names were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, initiated the largest call position in Amgen, Inc. (NASDAQ:AMGN). Citadel Investment Group had $45.6 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also initiated a $24.1 million position during the quarter. The other funds with brand new AMGN positions are Matthew Tewksbury’s Stevens Capital Management, Nick Niell’s Arrowgrass Capital Partners, and David Costen Haley’s HBK Investments.

Let’s now take a look at hedge fund activity in other stocks similar to Amgen, Inc. (NASDAQ:AMGN). These stocks are TOTAL S.A. (ADR) (NYSE:TOT), Gilead Sciences, Inc. (NASDAQ:GILD), BP plc (ADR) (NYSE:BP), and Sanofi SA (ADR) (NYSE:SNY). This group of stocks’ market valuations resemble AMGN’s market valuation.

As you can see these stocks had an average of 40.25 hedge funds with bullish positions and the average amount invested in these stocks was $1.33 billion. That figure was $1.86 billion in AMGN’s case. Gilead Sciences, Inc. (NASDAQ:GILD) is the most popular stock in this table. On the other hand TOTAL S.A. (ADR) (NYSE:TOT) is the least popular one with only 14 bullish hedge fund positions. Amgen, Inc. (NASDAQ:AMGN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GILD might be a better candidate to consider a long position in.

Disclosure: None