Is HZNP Stock A Buy or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 887 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of Horizon Therapeutics Public Limited Company (NASDAQ:HZNP).

Is HZNP stock a buy or sell? Horizon Therapeutics (HZNP) investors should be aware of a decrease in support from the world’s most elite money managers recently. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was in 55 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 61. There were 61 hedge funds in our database with HZNP holdings at the end of September. Our calculations also showed that HZNP isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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 124 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.


John Paulson of Paulson & Co

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. 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 homepage (or at the end of this article). Keeping this in mind we’re going to take a glance at the key hedge fund action encompassing Horizon Therapeutics Public Limited Company (NASDAQ:HZNP).

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

At the end of December, a total of 55 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the third quarter of 2020. By comparison, 33 hedge funds held shares or bullish call options in HZNP a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was held by Avoro Capital Advisors (venBio Select Advisor), which reported holding $658.4 million worth of stock at the end of December. It was followed by Paulson & Co with a $584.6 million position. Other investors bullish on the company included Renaissance Technologies, Viking Global, and Perceptive Advisors. 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 15.17% of its 13F portfolio. Avoro Capital Advisors (venBio Select Advisor) is also relatively very bullish on the stock, designating 11.34 percent of its 13F equity portfolio to HZNP.

Due to the fact that Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few fund managers that elected to cut their positions entirely last quarter. Intriguingly, James E. Flynn’s Deerfield Management sold off the largest stake of all the hedgies watched by Insider Monkey, comprising an estimated $142.4 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund cut about $34.4 million worth. These transactions are interesting, as total hedge fund interest fell by 6 funds last quarter.

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 Occidental Petroleum Corporation (NYSE:OXY), Expeditors International of Washington, Inc. (NASDAQ:EXPD), PerkinElmer, Inc. (NYSE:PKI), Quest Diagnostics Incorporated (NYSE:DGX), Nucor Corporation (NYSE:NUE), KeyCorp (NYSE:KEY), and Citrix Systems, Inc. (NASDAQ:CTXS). All of these stocks’ market caps are similar to HZNP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OXY 49 2151233 6
EXPD 25 477813 -6
PKI 31 1978722 -5
DGX 45 531778 3
NUE 29 138612 1
KEY 29 317740 -4
CTXS 29 352466 -2
Average 33.9 849766 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $850 million. That figure was $3793 million in HZNP’s case. Occidental Petroleum Corporation (NYSE:OXY) is the most popular stock in this table. On the other hand Expeditors International of Washington, Inc. (NASDAQ:EXPD) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is more popular among hedge funds. Our overall hedge fund sentiment score for HZNP is 76. 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 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 returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on HZNP as the stock returned 22.5% since the end of December (through 3/19) 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.

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