Is Biogen Idec Inc. (NASDAQ:BIIB) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
So, is Biogen Idec Inc. (NASDAQ:BIIB) a great investment today? Our calculations show that prominent investors are getting less optimistic. The number of long hedge fund bets shrunk by 3 recently. 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 Mondelez International Inc (NASDAQ:MDLZ), NTT Docomo Inc (ADR) (NYSE:DCM), and Westpac Banking Corporation (ADR) (NYSE:WBK) to gather more data points.
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Hedge fund activity in Biogen Idec Inc. (NASDAQ:BIIB)
At Q3’s end, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the largest position in Biogen Idec Inc. (NASDAQ:BIIB). OrbiMed Advisors has a $381.5 million position in the stock, comprising 3.9% of its 13F portfolio. The second most bullish fund manager is AQR Capital Management, led by Cliff Asness, holding a $286 million position; 0.6% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism include Robert Pitts’ Steadfast Capital Management, Rob Citrone’s Discovery Capital Management and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.
Seeing as Biogen Idec Inc. (NASDAQ:BIIB) has faced a declination in interest from the smart money, it’s safe to say that there exists a select few hedgies that slashed their entire stakes heading into Q4. At the top of the heap, Andreas Halvorsen’s Viking Global dumped the largest investment of the 700 funds followed by Insider Monkey, comprising an estimated $207.4 million in stock, and Zach Schreiber’s Point State Capital was right behind this move, as the fund sold off about $56.2 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Biogen Idec Inc. (NASDAQ:BIIB) but similarly valued. These stocks are Mondelez International Inc (NASDAQ:MDLZ), NTT Docomo Inc (ADR) (NYSE:DCM), Westpac Banking Corporation (ADR) (NYSE:WBK), and Lockheed Martin Corporation (NYSE:LMT). This group of stocks’ market caps are similar to BIIB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDLZ | 69 | 6878821 | 20 |
| DCM | 7 | 53748 | 2 |
| WBK | 6 | 24902 | 1 |
| LMT | 39 | 1204568 | 3 |
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $2.04 billion. That figure was $3.20 billion in BIIB’s case. Mondelez International Inc (NASDAQ:MDLZ) is the most popular stock in this table. On the other hand Westpac Banking Corporation (ADR) (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. Biogen Idec Inc. (NASDAQ:BIIB) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MDLZ might be a better candidate to consider a long position.
