At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Amicus Therapeutics, Inc. (NASDAQ:FOLD) makes for a good investment right now.
Is FOLD a good stock to buy now? Prominent investors were in a bullish mood. The number of long hedge fund positions went up by 6 lately. Amicus Therapeutics, Inc. (NASDAQ:FOLD) was in 38 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 35. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FOLD 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). There were 32 hedge funds in our database with FOLD positions at the end of the second quarter.
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 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Keeping this in mind let’s view the fresh hedge fund action regarding Amicus Therapeutics, Inc. (NASDAQ:FOLD).
Do Hedge Funds Think FOLD Is A Good Stock To Buy Now?
At third quarter’s end, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. By comparison, 28 hedge funds held shares or bullish call options in FOLD a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Amicus Therapeutics, Inc. (NASDAQ:FOLD) was held by Perceptive Advisors, which reported holding $354.7 million worth of stock at the end of September. It was followed by Redmile Group with a $325.8 million position. Other investors bullish on the company included Avoro Capital Advisors (venBio Select Advisor), Palo Alto Investors, and D E Shaw. In terms of the portfolio weights assigned to each position Palo Alto Investors allocated the biggest weight to Amicus Therapeutics, Inc. (NASDAQ:FOLD), around 6.1% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, setting aside 5.98 percent of its 13F equity portfolio to FOLD.
As one would reasonably expect, some big names have jumped into Amicus Therapeutics, Inc. (NASDAQ:FOLD) headfirst. Ghost Tree Capital, managed by Ken Greenberg and David Kim, created the largest position in Amicus Therapeutics, Inc. (NASDAQ:FOLD). Ghost Tree Capital had $8.5 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Michael Gelband’s ExodusPoint Capital, Jinghua Yan’s TwinBeech Capital, and Minhua Zhang’s Weld Capital Management.
Let’s go over 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 ONE Gas Inc (NYSE:OGS), Pilgrim’s Pride Corporation (NASDAQ:PPC), Varonis Systems Inc (NASDAQ:VRNS), Hawaiian Electric Industries, Inc. (NYSE:HE), BOK Financial Corporation (NASDAQ:BOKF), Devon Energy Corporation (NYSE:DVN), and Madison Square Garden Sports Corp. (NYSE:). This group of stocks’ market caps resemble FOLD’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.3 hedge funds with bullish positions and the average amount invested in these stocks was $342 million. That figure was $1192 million in FOLD’s case. Madison Square Garden Sports Corp. (NYSE:MSGS) is the most popular stock in this table. On the other hand Pilgrim’s Pride Corporation (NASDAQ:PPC) is the least popular one with only 18 bullish hedge fund positions. Amicus Therapeutics, Inc. (NASDAQ:FOLD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FOLD is 73.3. 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. 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 gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on FOLD as the stock returned 69.8% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.