At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Regeneron Pharmaceuticals Inc (NASDAQ:REGN) makes for a good investment right now.
Is REGN a good stock to buy now? REGN shareholders have witnessed a decrease in hedge fund sentiment in recent months. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) was in 44 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 49. Our calculations also showed that REGN 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most traders, hedge funds are assumed to be worthless, old investment vehicles of years past. While there are greater than 8000 funds in operation at the moment, Our researchers look at the crème de la crème of this club, about 850 funds. These money managers administer bulk of the smart money's total asset base, and by tailing their top investments, Insider Monkey has spotted various investment strategies that have historically outrun the S&P 500 index. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Phill Gross Adage Capital Phillip Gross
Phillip Gross of Adage Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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 let's take a look at the latest hedge fund action surrounding Regeneron Pharmaceuticals Inc (NASDAQ:REGN).
Do Hedge Funds Think REGN Is A Good Stock To Buy Now?
At third quarter's end, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. On the other hand, there were a total of 35 hedge funds with a bullish position in REGN a year ago. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the number one position in Regeneron Pharmaceuticals Inc (NASDAQ:REGN). Renaissance Technologies has a $600.3 million position in the stock, comprising 0.6% of its 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $260.4 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism encompass Ken Griffin's Citadel Investment Group, Arthur B Cohen and Joseph Healey's Healthcor Management LP and Phill Gross and Robert Atchinson's Adage Capital Management. In terms of the portfolio weights assigned to each position Voleon Capital allocated the biggest weight to Regeneron Pharmaceuticals Inc (NASDAQ:REGN), around 8.84% of its 13F portfolio. Healthcor Management LP is also relatively very bullish on the stock, dishing out 4.26 percent of its 13F equity portfolio to REGN.
Seeing as Regeneron Pharmaceuticals Inc (NASDAQ:REGN) has witnessed falling interest from the smart money, logic holds that there is a sect of funds who sold off their positions entirely in the third quarter. Interestingly, Brandon Haley's Holocene Advisors cut the largest stake of the 750 funds watched by Insider Monkey, totaling an estimated $76.7 million in stock. Roberto Mignone's fund, Bridger Management, also said goodbye to its stock, about $35 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 5 funds in the third quarter.
Let's go over hedge fund activity in other stocks similar to Regeneron Pharmaceuticals Inc (NASDAQ:REGN). These stocks are CSX Corporation (NASDAQ:CSX), Enbridge Inc (NYSE:ENB), BP plc (NYSE:BP), Infosys Limited (NYSE:INFY), Marsh & McLennan Companies, Inc. (NYSE:MMC), The Southern Company (NYSE:SO), and Ecolab Inc. (NYSE:ECL). This group of stocks' market values are similar to REGN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CSX,58,3253140,12 ENB,25,342708,-3 BP,30,611924,3 INFY,22,1427968,-1 MMC,35,841460,-3 SO,25,305510,-13 ECL,52,2270732,6 Average,35.3,1293349,0.1 [/table]
As you can see these stocks had an average of 35.3 hedge funds with bullish positions and the average amount invested in these stocks was $1293 million. That figure was $1404 million in REGN's case. CSX Corporation (NASDAQ:CSX) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 22 bullish hedge fund positions. Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for REGN is 57.5. 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 32.9% in 2020 through December 8th and beat the market again by 16.2 percentage points. Unfortunately REGN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on REGN were disappointed as the stock returned -11.2% since the end of September (through 12/8) 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.
