We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) based on that data.
Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. HZNP was in 41 hedge funds’ portfolios at the end of March. There were 33 hedge funds in our database with HZNP positions at the end of the previous quarter. Our calculations also showed that HZNP isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 44 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 36% through May 18th. 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, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a glance at the new hedge fund action encompassing Horizon Therapeutics Public Limited Company (NASDAQ:HZNP).
How have hedgies been trading Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)?
Heading into the second quarter of 2020, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 24% from one quarter earlier. On the other hand, there were a total of 41 hedge funds with a bullish position in HZNP a year ago. So, let’s examine 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 Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), with a stake worth $314.7 million reported as of the end of September. Trailing Renaissance Technologies was Paulson & Co, which amassed a stake valued at $242 million. Deerfield Management, Avoro Capital Advisors (venBio Select Advisor), and D E Shaw 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 Paulson & Co allocated the biggest weight to Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), around 9.23% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, setting aside 5.73 percent of its 13F equity portfolio to HZNP.
As one would reasonably expect, some big names were leading the bulls’ herd. Viking Global, managed by Andreas Halvorsen, assembled the biggest position in Horizon Therapeutics Public Limited Company (NASDAQ:HZNP). Viking Global had $59 million invested in the company at the end of the quarter. Henrik Rhenman’s Rhenman & Partners Asset Management also initiated a $29.6 million position during the quarter. The following funds were also among the new HZNP investors: Arthur B Cohen and Joseph Healey’s Healthcor Management LP, Julian Baker and Felix Baker’s Baker Bros. Advisors, and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) but similarly valued. We will take a look at Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), Knight-Swift Transportation Holdings Inc. (NYSE:KNX), Gentex Corporation (NASDAQ:GNTX), and UGI Corp (NYSE:UGI). This group of stocks’ market valuations match HZNP’s market valuation.
|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 31.25 hedge funds with bullish positions and the average amount invested in these stocks was $473 million. That figure was $1686 million in HZNP’s case. Gentex Corporation (NASDAQ:GNTX) is the most popular stock in this table. On the other hand UGI Corp (NYSE:UGI) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on HZNP as the stock returned 71.3% so far in Q2 (through the end of May) 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.