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 have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Blueprint Medicines Corporation (NASDAQ:BPMC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Blueprint Medicines Corporation (NASDAQ:BPMC) ready to rally soon? Money managers were taking a bearish view. The number of bullish hedge fund positions fell by 7 in recent months. Blueprint Medicines Corporation (NASDAQ:BPMC) was in 31 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that BPMC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Lei Zhang of Hillhouse Capital Management
At Insider Monkey, we scour multiple sources to uncover 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 EV 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. Now let’s review the recent hedge fund action regarding Blueprint Medicines Corporation (NASDAQ:BPMC).
Do Hedge Funds Think BPMC Is A Good Stock To Buy Now?
At the end of March, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BPMC over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Lone Pine Capital was the largest shareholder of Blueprint Medicines Corporation (NASDAQ:BPMC), with a stake worth $263.4 million reported as of the end of March. Trailing Lone Pine Capital was Casdin Capital, which amassed a stake valued at $150.7 million. Alkeon Capital Management, Cadian Capital, and Hillhouse Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Aquilo Capital Management allocated the biggest weight to Blueprint Medicines Corporation (NASDAQ:BPMC), around 7.43% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, designating 4.8 percent of its 13F equity portfolio to BPMC.
Since Blueprint Medicines Corporation (NASDAQ:BPMC) has faced bearish sentiment from hedge fund managers, logic holds that there was a specific group of hedge funds that decided to sell off their entire stakes last quarter. It’s worth mentioning that Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management dropped the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $15.3 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $14.1 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 7 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Blueprint Medicines Corporation (NASDAQ:BPMC). We will take a look at Rexnord Corp (NYSE:RXN), Adaptive Biotechnologies Corporation (NASDAQ:ADPT), Upwork Inc. (NASDAQ:UPWK), Just Eat Takeaway.com N.V. (NASDAQ:GRUB), Air Lease Corp (NYSE:AL), Omnicell, Inc. (NASDAQ:OMCL), and South State Corporation (NASDAQ:SSB). This group of stocks’ market valuations resemble BPMC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RXN | 25 | 383506 | 5 |
| ADPT | 29 | 2138890 | -1 |
| UPWK | 32 | 530996 | -2 |
| GRUB | 35 | 1075678 | -3 |
| AL | 27 | 917435 | 3 |
| OMCL | 19 | 73328 | -1 |
| SSB | 24 | 252240 | 7 |
| Average | 27.3 | 767439 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $767 million. That figure was $1058 million in BPMC’s case. Just Eat Takeaway.com N.V. (NASDAQ:GRUB) is the most popular stock in this table. On the other hand Omnicell, Inc. (NASDAQ:OMCL) is the least popular one with only 19 bullish hedge fund positions. Blueprint Medicines Corporation (NASDAQ:BPMC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BPMC is 60. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately BPMC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BPMC were disappointed as the stock returned -11.5% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 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.
