In this article you are going to find out whether hedge funds think Regenxbio Inc (NASDAQ:RGNX) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is RGNX a good stock to buy now? Regenxbio Inc (NASDAQ:RGNX) shareholders have witnessed a decrease in support from the world’s most elite money managers lately. Regenxbio Inc (NASDAQ:RGNX) was in 22 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 24. Our calculations also showed that RGNX 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.
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 scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Now we’re going to take a gander at the recent hedge fund action regarding Regenxbio Inc (NASDAQ:RGNX).
Do Hedge Funds Think RGNX Is A Good Stock To Buy Now?
At the end of September, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RGNX over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
The largest stake in Regenxbio Inc (NASDAQ:RGNX) was held by Redmile Group, which reported holding $61.3 million worth of stock at the end of September. It was followed by Aquilo Capital Management with a $14.1 million position. Other investors bullish on the company included Hillhouse Capital Management, Water Street Capital, and Woodline Partners. In terms of the portfolio weights assigned to each position Sonic Capital allocated the biggest weight to Regenxbio Inc (NASDAQ:RGNX), around 5.1% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, dishing out 2.53 percent of its 13F equity portfolio to RGNX.
Because Regenxbio Inc (NASDAQ:RGNX) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds who were dropping their full holdings last quarter. Intriguingly, Steve Cohen’s Point72 Asset Management sold off the biggest position of all the hedgies tracked by Insider Monkey, comprising about $6.8 million in stock, and Chuck Royce’s Royce & Associates was right behind this move, as the fund dropped about $2.2 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Regenxbio Inc (NASDAQ:RGNX). We will take a look at Live Oak Bancshares Inc (NASDAQ:LOB), Universal Corp (NYSE:UVV), Lithium Americas Corp. (NYSE:LAC), The ODP Corporation (NASDAQ:ODP), TPI Composites, Inc. (NASDAQ:TPIC), Covanta Holding Corporation (NYSE:CVA), and Malibu Boats Inc (NASDAQ:MBUU). All of these stocks’ market caps match RGNX’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 15 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $144 million in RGNX’s case. Covanta Holding Corporation (NYSE:CVA) is the most popular stock in this table. On the other hand Lithium Americas Corp. (NYSE:LAC) is the least popular one with only 3 bullish hedge fund positions. Regenxbio Inc (NASDAQ:RGNX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RGNX is 79. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on RGNX as the stock returned 46.1% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.