Is Vertex Pharmaceuticals Incorporated (VRTX) Going to Burn These Hedge Funds?

Because Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) has experienced no change in sentiment from hedge fund managers, we should take a look at a certain “tier” of funds that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, Robert Pohly’s Samlyn Capital sold off the biggest position of the 700 funds watched by Insider Monkey, comprising about $42.2 million in stock, and Doug Silverman and Alexander Klabin’s Senator Investment Group was right behind this move, as the fund dumped about $34 million worth or VRTX shares. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) but similarly valued. These stocks are Edwards Lifesciences Corp (NYSE:EW), Synchrony Financial (NYSE:SYF), Apache Corporation (NYSE:APA), and Williams Partners L.P. (NYSE:WPZ). This group of stocks’ market caps are closest to VRTX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EW 38 2001027 -5
SYF 48 4023745 -12
APA 33 1302418 0
WPZ 11 478129 -2

As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1.95 billion. That figure was a meager $454 million in VRTX’s case. Synchrony Financial (NYSE:SYF) is the most popular stock in this table. On the other hand Williams Partners L.P. (NYSE:WPZ) is the least popular one with only 11 bullish hedge fund positions. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SYF might be a better candidate to consider a long position.

Disclosure: none.