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 at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded MeiraGTx Holdings plc (NASDAQ:MGTX) and determine whether the smart money was really smart about this stock.
MeiraGTx Holdings plc (NASDAQ:MGTX) shareholders have witnessed an increase in support from the world’s most elite money managers of late. MeiraGTx Holdings plc (NASDAQ:MGTX) was in 18 hedge funds’ portfolios at the end of June. The all time high for this statistics is 21. Our calculations also showed that MGTX isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Samuel Isaly of OrbiMed Advisors
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 are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. Now we’re going to go over the latest hedge fund action regarding MeiraGTx Holdings plc (NASDAQ:MGTX).
How have hedgies been trading MeiraGTx Holdings plc (NASDAQ:MGTX)?
At the end of June, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MGTX over the last 20 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in MeiraGTx Holdings plc (NASDAQ:MGTX) was held by Perceptive Advisors, which reported holding $80.5 million worth of stock at the end of September. It was followed by OrbiMed Advisors with a $46.5 million position. Other investors bullish on the company included Alyeska Investment Group, Prosight Capital, and Adage Capital Management. In terms of the portfolio weights assigned to each position Prosight Capital allocated the biggest weight to MeiraGTx Holdings plc (NASDAQ:MGTX), around 2.79% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, earmarking 1.31 percent of its 13F equity portfolio to MGTX.
As industrywide interest jumped, key money managers have jumped into MeiraGTx Holdings plc (NASDAQ:MGTX) headfirst. Millennium Management, managed by Israel Englander, initiated the largest position in MeiraGTx Holdings plc (NASDAQ:MGTX). Millennium Management had $0.2 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital also initiated a $0 million position during the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as MeiraGTx Holdings plc (NASDAQ:MGTX) but similarly valued. These stocks are Triumph Group Inc (NYSE:TGI), Merus N.V. (NASDAQ:MRUS), BJ’s Restaurants, Inc. (NASDAQ:BJRI), VirnetX Holding Corporation (NYSE:VHC), Harmonic Inc (NASDAQ:HLIT), Dime Community Bancshares, Inc. (NASDAQ:DCOM), and Urstadt Biddle Properties Inc. (NYSE:UBP). This group of stocks’ market valuations resemble MGTX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TGI | 14 | 51304 | -4 |
| MRUS | 15 | 164573 | 4 |
| BJRI | 12 | 23481 | -1 |
| VHC | 6 | 2736 | 3 |
| HLIT | 15 | 58697 | -1 |
| DCOM | 13 | 35404 | 3 |
| UBP | 1 | 853 | 0 |
| Average | 10.9 | 48150 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $163 million in MGTX’s case. Merus N.V. (NASDAQ:MRUS) is the most popular stock in this table. On the other hand Urstadt Biddle Properties Inc. (NYSE:UBP) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks MeiraGTx Holdings plc (NASDAQ:MGTX) is more popular among hedge funds. Our overall hedge fund sentiment score for MGTX is 81.7. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Unfortunately MGTX wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on MGTX were disappointed as the stock returned 5.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
