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Pacira Pharmaceuticals Inc (PCRX): Are Hedge Funds Right About This Stock?

After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Pacira Pharmaceuticals Inc (NASDAQ:PCRX).

Pacira Pharmaceuticals Inc (NASDAQ:PCRX) has experienced an increase in enthusiasm from smart money of late. PCRX was in 25 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with PCRX positions at the end of the previous quarter. Our calculations also showed that PCRX isn’t among the 30 most popular stocks among hedge funds.

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’ large-cap stock picks indeed failed to the beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Arthur B Cohen and Joseph Healey, Healthcor Management LP

Let’s take a peek at the recent hedge fund action regarding Pacira Pharmaceuticals Inc (NASDAQ:PCRX).

How are hedge funds trading Pacira Pharmaceuticals Inc (NASDAQ:PCRX)?

At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PCRX over the last 13 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

PCRX_dec2018

Among these funds, Consonance Capital Management held the most valuable stake in Pacira Pharmaceuticals Inc (NASDAQ:PCRX), which was worth $179.5 million at the end of the third quarter. On the second spot was Partner Fund Management which amassed $137.5 million worth of shares. Moreover, Healthcor Management LP, Millennium Management, and Rock Springs Capital Management were also bullish on Pacira Pharmaceuticals Inc (NASDAQ:PCRX), allocating a large percentage of their portfolios to this stock.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, initiated the largest position in Pacira Pharmaceuticals Inc (NASDAQ:PCRX). Polar Capital had $13.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $8 million position during the quarter. The following funds were also among the new PCRX investors: John Overdeck and David Siegel’s Two Sigma Advisors, Jim Simons’s Renaissance Technologies, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks similar to Pacira Pharmaceuticals Inc (NASDAQ:PCRX). We will take a look at At Home Group Inc. (NYSE:HOME), Azul S.A. (NYSE:AZUL), Heartland Financial USA Inc (NASDAQ:HTLF), and NetGear, Inc. (NASDAQ:NTGR). This group of stocks’ market valuations are closest to PCRX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HOME 22 221719 1
AZUL 11 89027 -10
HTLF 6 23461 -1
NTGR 16 36926 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $689 million in PCRX’s case. At Home Group Inc. (NYSE:HOME) is the most popular stock in this table. On the other hand Heartland Financial USA Inc (NASDAQ:HTLF) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Pacira Pharmaceuticals Inc (NASDAQ:PCRX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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

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