In this article we will take a look at whether hedge funds think BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is BCRX a good stock to buy now? The best stock pickers were taking a pessimistic view. The number of long hedge fund positions were trimmed by 4 lately. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) was in 22 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 26. Our calculations also showed that BCRX isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
At the moment there are a lot of indicators stock market investors employ to value stocks. A pair of the most useful indicators are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the elite money managers can outpace the market by a solid margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s take a look at the latest hedge fund action regarding BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX).
Do Hedge Funds Think BCRX Is A Good Stock To Buy Now?
At the end of September, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in BCRX a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, Baker Bros. Advisors was the largest shareholder of BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), with a stake worth $43.6 million reported as of the end of September. Trailing Baker Bros. Advisors was Citadel Investment Group, which amassed a stake valued at $29.8 million. Sarissa Capital Management, Deerfield Management, and Millennium 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 DG Capital Management allocated the biggest weight to BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), around 2.45% of its 13F portfolio. Sarissa Capital Management is also relatively very bullish on the stock, earmarking 1.97 percent of its 13F equity portfolio to BCRX.
Judging by the fact that BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) has witnessed declining sentiment from the smart money, it’s easy to see that there was a specific group of fund managers who sold off their full holdings heading into Q4. Intriguingly, Matthew L Pinz’s Pinz Capital said goodbye to the largest investment of all the hedgies watched by Insider Monkey, totaling about $0.9 million in stock. Adam Usdan’s fund, Trellus Management Company, also sold off its stock, about $0.8 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 4 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks similar to BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX). These stocks are Zynex, Inc. (NASDAQ:ZYXI), Quanex Building Products Corporation (NYSE:NX), State Auto Financial Corporation (NASDAQ:STFC), iClick Interactive Asia Group Limited (NASDAQ:ICLK), Relmada Therapeutics, Inc. (NASDAQ:RLMD), Hanger, Inc. (NYSE:HNGR), and Impinj, Inc. (NASDAQ:PI). This group of stocks’ market values match BCRX’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 12.3 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $157 million in BCRX’s case. Impinj, Inc. (NASDAQ:PI) is the most popular stock in this table. On the other hand State Auto Financial Corporation (NASDAQ:STFC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is more popular among hedge funds. Our overall hedge fund sentiment score for BCRX is 76.4. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on BCRX as the stock returned 147.1% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.