Is AMRN Stock A Buy or Sell?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Amarin Corporation plc (NASDAQ:AMRN) based on those filings.

Is AMRN stock a buy? Amarin Corporation plc (NASDAQ:AMRN) was in 24 hedge funds’ portfolios at the end of December. The all time high for this statistic is 39. AMRN has experienced a decrease in enthusiasm from smart money of late. There were 30 hedge funds in our database with AMRN positions at the end of the third quarter. Our calculations also showed that AMRN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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Do Hedge Funds Think AMRN Is A Good Stock To Buy Now?

At Q4’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the previous quarter. By comparison, 36 hedge funds held shares or bullish call options in AMRN a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Baker Bros. Advisors was the largest shareholder of Amarin Corporation plc (NASDAQ:AMRN), with a stake worth $136.9 million reported as of the end of December. Trailing Baker Bros. Advisors was Eversept Partners, which amassed a stake valued at $78 million. Biotechnology Value Fund / BVF Inc, Avoro Capital Advisors (venBio Select Advisor), and Rock Springs Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Eversept Partners allocated the biggest weight to Amarin Corporation plc (NASDAQ:AMRN), around 9.28% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, earmarking 4.6 percent of its 13F equity portfolio to AMRN.

Judging by the fact that Amarin Corporation plc (NASDAQ:AMRN) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds who were dropping their positions entirely heading into Q1. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the largest position of all the hedgies tracked by Insider Monkey, comprising close to $1.4 million in stock. Bihua Chen’s fund, Cormorant Asset Management, also dumped its stock, about $1.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 6 funds heading into Q1.

Let’s now review hedge fund activity in other stocks similar to Amarin Corporation plc (NASDAQ:AMRN). We will take a look at Boise Cascade Co (NYSE:BCC), O-I Glass, Inc. (NYSE:OI), InterDigital, Inc. (NASDAQ:IDCC), Belden Inc. (NYSE:BDC), Sorrento Therapeutics Inc (NASDAQ:SRNE), Welbilt, Inc. (NYSE:WBT), and Air Transport Services Group Inc. (NASDAQ:ATSG). This group of stocks’ market valuations resemble AMRN’s market valuation.

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As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $400 million in AMRN’s case. O-I Glass, Inc. (NYSE:OI) is the most popular stock in this table. On the other hand Sorrento Therapeutics Inc (NASDAQ:SRNE) is the least popular one with only 13 bullish hedge fund positions. Amarin Corporation plc (NASDAQ:AMRN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AMRN is 63.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately AMRN wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on AMRN were disappointed as the stock returned 3.1% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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