In this article we will analyze whether Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is REGN stock a buy or sell? Prominent investors were betting on the stock. The number of bullish hedge fund positions went up by 2 in recent months. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was in 46 hedge funds’ portfolios at the end of December. The all time high for this statistic is 49. Our calculations also showed that REGN isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 44 hedge funds in our database with REGN holdings at the end of September.
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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).
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). Now we’re going to view the latest hedge fund action encompassing Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
Do Hedge Funds Think REGN Is A Good Stock To Buy Now?
At the end of December, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards REGN over the last 22 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was held by Renaissance Technologies, which reported holding $437.2 million worth of stock at the end of December. It was followed by ARK Investment Management with a $218.3 million position. Other investors bullish on the company included AQR Capital Management, Millennium Management, and Armistice Capital. In terms of the portfolio weights assigned to each position Sivik Global Healthcare allocated the biggest weight to Regeneron Pharmaceuticals Inc (NASDAQ:REGN), around 3.94% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, dishing out 2.85 percent of its 13F equity portfolio to REGN.
As aggregate interest increased, specific money managers were leading the bulls’ herd. ARK Investment Management, managed by Catherine D. Wood, established the most outsized position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN). ARK Investment Management had $218.3 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also initiated a $18.6 million position during the quarter. The other funds with brand new REGN positions are Louis Bacon’s Moore Global Investments, Michael Rockefeller and Karl Kroeker’s Woodline Partners, and John Hempton’s Bronte Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Regeneron Pharmaceuticals Inc (NASDAQ:REGN) but similarly valued. We will take a look at Dollar General Corp. (NYSE:DG), ICICI Bank Limited (NYSE:IBN), Boston Scientific Corporation (NYSE:BSX), Northrop Grumman Corporation (NYSE:NOC), UBS Group AG (NYSE:UBS), Southern Copper Corporation (NYSE:SCCO), and Waste Management, Inc. (NYSE:WM). This group of stocks’ market values match REGN’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 37.4 hedge funds with bullish positions and the average amount invested in these stocks was $1656 million. That figure was $1330 million in REGN’s case. Boston Scientific Corporation (NYSE:BSX) is the most popular stock in this table. On the other hand UBS Group AG (NYSE:UBS) is the least popular one with only 18 bullish hedge fund positions. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for REGN is 70.2. 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 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 gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately REGN wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on REGN were disappointed as the stock returned -1.9% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.