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These Hedge Funds Cashed Out Of Regenxbio Inc (RGNX) Too Early

We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Regenxbio Inc (NASDAQ:RGNX) based on that data.

Is Regenxbio Inc (NASDAQ:RGNX) a buy here? The best stock pickers are getting less bullish. The number of long hedge fund positions shrunk by 4 in recent months. Our calculations also showed that RGNX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

At the moment there are a lot of methods market participants use to appraise stocks. Two of the most underrated methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the top investment managers can beat their index-focused peers by a solid margin (see the details here).

Sander Gerber of Hudson Bay Capital

Sander Gerber of Hudson Bay Capital

We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy  based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We’re going to view the new hedge fund action regarding Regenxbio Inc (NASDAQ:RGNX).

What does smart money think about Regenxbio Inc (NASDAQ:RGNX)?

Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RGNX over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Jeremy Green’s Redmile Group has the largest position in Regenxbio Inc (NASDAQ:RGNX), worth close to $84.1 million, comprising 2.8% of its total 13F portfolio. Sitting at the No. 2 spot is Gilchrist Berg of Water Street Capital, with a $34.1 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions consist of Joseph Edelman’s Perceptive Advisors, Lei Zhang’s Hillhouse Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position P.A.W. Capital Partners allocated the biggest weight to Regenxbio Inc (NASDAQ:RGNX), around 2.89% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, dishing out 2.81 percent of its 13F equity portfolio to RGNX.

Judging by the fact that Regenxbio Inc (NASDAQ:RGNX) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there exists a select few funds that decided to sell off their full holdings by the end of the third quarter. It’s worth mentioning that Renaissance Technologies cut the biggest stake of the 750 funds tracked by Insider Monkey, valued at close to $18 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dropped its stock, about $7.8 million worth. These moves are important to note, as aggregate hedge fund interest fell by 4 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Regenxbio Inc (NASDAQ:RGNX). We will take a look at First Commonwealth Financial (NYSE:FCF), Scholastic Corp (NASDAQ:SCHL), Cooper Tire & Rubber Company (NYSE:CTB), and Green Dot Corporation (NYSE:GDOT). This group of stocks’ market valuations are similar to RGNX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FCF 11 30734 -1
SCHL 16 78029 2
CTB 18 135042 3
GDOT 20 192467 2
Average 16.25 109068 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $109 million. That figure was $172 million in RGNX’s case. Green Dot Corporation (NYSE:GDOT) is the most popular stock in this table. On the other hand First Commonwealth Financial (NYSE:FCF) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Regenxbio Inc (NASDAQ:RGNX) is even less popular than FCF. Hedge funds clearly dropped the ball on RGNX as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on RGNX as the stock returned 17.6% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.

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

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