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. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2020. What do these smart investors think about Eagle Pharmaceuticals Inc (NASDAQ:EGRX)?
Is EGRX a good stock to buy now? Eagle Pharmaceuticals Inc (NASDAQ:EGRX) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds' portfolios at the end of September. Our calculations also showed that EGRX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare EGRX to other stocks including Amneal Pharmaceuticals, Inc. (NYSE:AMRX), Loop Industries, Inc. (NASDAQ:LOOP), and Agilysys, Inc. (NASDAQ:AGYS) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a multitude of signals stock market investors have at their disposal to size up stocks. Some of the most underrated signals are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best money managers can outperform the S&P 500 by a significant margin (see the details here).
Alex Litowitz Magnetar Capital
Alec Litowitz of Magnetar Capital
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 recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Keeping this in mind we're going to take a glance at the new hedge fund action surrounding Eagle Pharmaceuticals Inc (NASDAQ:EGRX).
Do Hedge Funds Think EGRX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in EGRX a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Armistice Capital was the largest shareholder of Eagle Pharmaceuticals Inc (NASDAQ:EGRX), with a stake worth $28.5 million reported as of the end of September. Trailing Armistice Capital was Park West Asset Management, which amassed a stake valued at $27 million. Citadel Investment Group, Renaissance Technologies, and GLG Partners 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 Park West Asset Management allocated the biggest weight to Eagle Pharmaceuticals Inc (NASDAQ:EGRX), around 1.05% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, earmarking 1.04 percent of its 13F equity portfolio to EGRX.
Seeing as Eagle Pharmaceuticals Inc (NASDAQ:EGRX) has experienced falling interest from hedge fund managers, we can see that there lies a certain "tier" of funds that slashed their full holdings in the third quarter. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dumped the largest stake of the "upper crust" of funds watched by Insider Monkey, valued at close to $0.7 million in stock, and Joel Greenblatt's Gotham Asset Management was right behind this move, as the fund sold off about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Eagle Pharmaceuticals Inc (NASDAQ:EGRX). These stocks are Amneal Pharmaceuticals, Inc. (NYSE:AMRX), Loop Industries, Inc. (NASDAQ:LOOP), Agilysys, Inc. (NASDAQ:AGYS), Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX), Nicolet Bankshares Inc. (NASDAQ:NCBS), Athira Pharma, Inc. (NASDAQ:ATHA), and RPC, Inc. (NYSE:RES). This group of stocks' market valuations match EGRX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMRX,11,20102,0 LOOP,2,4442,0 AGYS,17,184719,-2 SNDX,25,202518,1 NCBS,1,1755,-3 ATHA,21,213993,21 RES,14,18496,-2 Average,13,92289,2.1 [/table]
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $99 million in EGRX's case. Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) is the most popular stock in this table. On the other hand Nicolet Bankshares Inc. (NASDAQ:NCBS) is the least popular one with only 1 bullish hedge fund positions. Eagle Pharmaceuticals Inc (NASDAQ:EGRX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EGRX is 57.1. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately EGRX wasn't nearly as popular as these 20 stocks and hedge funds that were betting on EGRX were disappointed as the stock returned 8.7% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
