With such a mixed performance over the past decade, some of us wonder why hedge funds are so revered. Ditto for many of the so-called guru fund managers. Still, investors love chasing the newest holdings and key changes made by many leading hedge funds. A Goldman Sachs report released this week showed the top 100 equity positions by size and frequency. What was interesting here is that this list was broken down as the top 50 long positions and top 50 short positions.
24/7 Wall St. is not alone in noticing how much interest there has been in biotech stocks. After all, with the exponential biotech gains seen over the past five years, it is hard to ignore them. It turns out that there were some interesting positions of hedge funds in biotech, long and short, from the Goldman Sachs Hedge Fund Trend Monitor. Apparently the basket has outperformed the S&P 500 in 66% of the quarters since 2001 by 73 basis points.
Pharmacyclics was the first name on the list of top biotechs owned, which is interesting when investors consider that it was effectively the newest of the most loved biotechs. Next on the list was Gilead Sciences, which is of course the world’s largest biotech by market cap. What may really draw the eyes of investors is that Amgen, Celgene and Regeneron Pharmaceuticals were on the list of the most shorted biotechs from these hedge funds.
Pharmacyclics Inc. (NASDAQ: PCYC) was again put as a new name in the top hedge fund stocks. Some 28% of the fund is owned by hedge funds, and the stock has doubled year to date. Trading at $259 or so recently, its 52-week range is $82.51 to $260.47, and it has a consensus analyst target price of roughly $246. Pharmacyclics also now carries a $20 billion market cap, and the $730 million in 2014 revenues are expected to have grown $1.12 billion at the end of 2015 and then to almost $1.9 billion by the end of 2016. The price-to-earnings (P/E) ratio of 600 or so is expected to compress to about 55 or 60 by the time 2016 is here.
Gilead Sciences Inc. (NASDAQ: GILD) is no shocker at all to see on the list. After all, it has grown and grown, and it has a market cap of $164 billion. Trading at $111, the shares have a 52-week range of $78.50 to $116.83 and the consensus price target is just over $121. What has kept many investors involved in Gilead is that the biotech giant jumped into the dividend game, with close to a 1.7% yield, and it is valued very cheaply at 10 to 11 times expected earnings. Gilead also just was named as an alternate pick in the 24/7 Wall St. list of 10 stocks to own for the next decade.
As Regeneron, Amgen and Celgene are short seller positions, we are simply giving the basics on each.
Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) trades at $516, with a 52-week trading range of $269.50 to $518.20. It has a market cap of $53 billion, and the consensus price target is roughly $503. Regeneron’s sales of $2.8 billion in 2014 are expected to grow to $3.7 billion in 2015 and almost $4.5 billion in 2016.
Amgen Inc. (NASDAQ: AMGN) trades at $164, against a 52-week range of $113.01 to $173.60. Its market cap is $124 billion, and analysts have a consensus price target of about $182. Amgen had sales of $20 billion in 2014, and those are expected to be $21.1 billion in 2015 and $21.9 billion in 2016. Do you think hedge fund short sellers are playing the slowdown?
Celgene Corp. (NASDAQ: CELG) was a massive growth engine from the start of 2012, but its shares may have started peaking early in 2015. Trading at $116, it has a 52-week range of $74.00 to $129.06 and a market cap of $92 billion. Analysts have a consensus price target north of $137. The $7.7 billion in 2014 revenue is expected to be $9.2 billion in 2015 and $11.2 billion in 2016.
The report that Goldman Sachs put together was a monumental effort. It was based on a whopping 685 hedge funds with securities filings, and they had a total of $961 billion in equity assets, if they had between 10 and 200 equity positions.