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Is Amicus Therapeutics, Inc. (FOLD) Going to Burn These Hedge Funds?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Amicus Therapeutics, Inc. (NASDAQ:FOLD) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

Amicus Therapeutics, Inc. (NASDAQ:FOLD) has seen an increase in support from the world’s most elite money managers of late. Amicus Therapeutics, Inc. (NASDAQ:FOLD) was in 32 hedge funds’ portfolios at the end of June. The all time high for this statistics is 35. Our calculations also showed that FOLD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Joseph Edelman of Perceptive Advisors

Joseph Edelman of Perceptive Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a gander at the new hedge fund action surrounding Amicus Therapeutics, Inc. (NASDAQ:FOLD).

What have hedge funds been doing with Amicus Therapeutics, Inc. (NASDAQ:FOLD)?

At Q2’s end, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in FOLD over the last 20 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Joseph Edelman’s Perceptive Advisors has the most valuable position in Amicus Therapeutics, Inc. (NASDAQ:FOLD), worth close to $379.8 million, amounting to 6.2% of its total 13F portfolio. Coming in second is Redmile Group, managed by Jeremy Green, which holds a $376.2 million position; 6.9% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism consist of Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor), William Leland Edwards’s Palo Alto Investors and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Redmile Group allocated the biggest weight to Amicus Therapeutics, Inc. (NASDAQ:FOLD), around 6.94% of its 13F portfolio. Palo Alto Investors is also relatively very bullish on the stock, setting aside 6.64 percent of its 13F equity portfolio to FOLD.

With a general bullishness amongst the heavyweights, some big names have jumped into Amicus Therapeutics, Inc. (NASDAQ:FOLD) headfirst. Ardsley Partners, managed by Philip Hempleman, initiated the most valuable position in Amicus Therapeutics, Inc. (NASDAQ:FOLD). Ardsley Partners had $3.8 million invested in the company at the end of the quarter. Efrem Kamen’s Pura Vida Investments also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Parvinder Thiara’s Athanor Capital, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Amicus Therapeutics, Inc. (NASDAQ:FOLD) but similarly valued. We will take a look at Highwoods Properties Inc (NYSE:HIW), QTS Realty Trust Inc (NYSE:QTS), Telecom Argentina S.A. (NYSE:TEO), Performance Food Group Company (NYSE:PFGC), Hudson Pacific Properties Inc (NYSE:HPP), The Hanover Insurance Group, Inc. (NYSE:THG), and Global Blood Therapeutics Inc (NASDAQ:GBT). This group of stocks’ market values match FOLD’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HIW 30 142676 15
QTS 29 513230 8
TEO 3 33682 -1
PFGC 20 215689 -9
HPP 24 437178 5
THG 25 133465 1
GBT 31 600038 8
Average 23.1 296565 3.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $297 million. That figure was $1316 million in FOLD’s case. Global Blood Therapeutics Inc (NASDAQ:GBT) is the most popular stock in this table. On the other hand Telecom Argentina S.A. (NYSE:TEO) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Amicus Therapeutics, Inc. (NASDAQ:FOLD) is more popular among hedge funds. Our overall hedge fund sentiment score for FOLD is 86.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and still beat the market by 17.6 percentage points. Unfortunately FOLD wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on FOLD were disappointed as the stock returned -8.7% since the end of the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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