Should You Avoid Amgen, Inc. (AMGN)?

The market has been volatile as the Federal Reserve winds down its easy money policies. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25th and the end of October. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Amgen, Inc. (NASDAQ:AMGN) and find out how it is affected by hedge funds’ moves.

Is Amgen, Inc. (NASDAQ:AMGN) ready to rally soon? The best stock pickers are in a bearish mood. The number of long hedge fund bets went down by five recently. AMGN was in 68 hedge funds’ portfolios at the end of December. There were 73 hedge funds in our database with AMGN holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as PetroChina Company Limited (ADR) (NYSE:PTR), Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM), and Bristol Myers Squibb Co. (NYSE:BMY) to gather more data points.

In the eyes of most shareholders, hedge funds are assumed to be underperforming, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open today, Our experts look at the bigwigs of this club, about 700 funds. These hedge fund managers control most of all hedge funds’ total capital, and by keeping an eye on their highest performing stock picks, Insider Monkey has discovered various investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.

One of the company’s long-term shareholders is activist billionaire Dan Loeb’s Third Point. Here’s what Third Point said about Amgen in one of its letters to investors back in 2014: