The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Gilead Sciences, Inc. (NASDAQ:GILD).
Is GILD a good stock to buy now? Gilead Sciences, Inc. (NASDAQ:GILD) investors should be aware of a decrease in activity from the world’s largest hedge funds of late. Gilead Sciences, Inc. (NASDAQ:GILD) was in 61 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 93. There were 68 hedge funds in our database with GILD positions at the end of the second quarter. Our calculations also showed that GILD 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.
If you’d ask most market participants, hedge funds are seen as slow, old financial tools of years past. While there are more than 8000 funds trading today, Our experts choose to focus on the masters of this group, approximately 850 funds. These money managers preside over most of the hedge fund industry’s total capital, and by tracking their top investments, Insider Monkey has spotted many investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium 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. With all of this in mind let’s review the key hedge fund action encompassing Gilead Sciences, Inc. (NASDAQ:GILD).
What have hedge funds been doing with Gilead Sciences, Inc. (NASDAQ:GILD)?
At the end of September, a total of 61 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GILD over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Gilead Sciences, Inc. (NASDAQ:GILD), with a stake worth $483.5 million reported as of the end of September. Trailing Renaissance Technologies was AQR Capital Management, which amassed a stake valued at $234.8 million. Redmile Group, Citadel Investment Group, and Citadel Investment Group 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 Healthcare Value Capital allocated the biggest weight to Gilead Sciences, Inc. (NASDAQ:GILD), around 10.41% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, designating 3.33 percent of its 13F equity portfolio to GILD.
Due to the fact that Gilead Sciences, Inc. (NASDAQ:GILD) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few hedge funds that slashed their full holdings heading into Q4. Interestingly, Brian Ashford-Russell and Tim Woolley’s Polar Capital sold off the largest position of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $17.3 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund dropped about $13.3 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 7 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to Gilead Sciences, Inc. (NASDAQ:GILD). We will take a look at The Estee Lauder Companies Inc (NYSE:EL), Target Corporation (NYSE:TGT), Zoetis Inc (NYSE:ZTS), Stryker Corporation (NYSE:SYK), CVS Health Corporation (NYSE:CVS), Morgan Stanley (NYSE:MS), and Canadian National Railway Company (NYSE:CNI). All of these stocks’ market caps resemble GILD’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 52.3 hedge funds with bullish positions and the average amount invested in these stocks was $2429 million. That figure was $1989 million in GILD’s case. Morgan Stanley (NYSE:MS) is the most popular stock in this table. On the other hand Canadian National Railway Company (NYSE:CNI) is the least popular one with only 26 bullish hedge fund positions. Gilead Sciences, Inc. (NASDAQ:GILD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GILD is 57.5. 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 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 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately GILD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GILD were disappointed as the stock returned -3.3% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.