Hedge Funds Are Buying Acorda Therapeutics Inc (ACOR) Again

The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Acorda Therapeutics Inc (NASDAQ:ACOR).

Acorda Therapeutics Inc (NASDAQ:ACOR) investors should be aware of an increase in activity from the world’s largest hedge funds recently. Acorda Therapeutics Inc (NASDAQ:ACOR) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 26. Our calculations also showed that ACOR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Joshua Friedman of Canyon Capital Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s take a look at the key hedge fund action regarding Acorda Therapeutics Inc (NASDAQ:ACOR).

Do Hedge Funds Think ACOR Is A Good Stock To Buy Now?

At the end of March, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in ACOR a year ago. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Steve Cohen’s Point72 Asset Management has the most valuable position in Acorda Therapeutics Inc (NASDAQ:ACOR), worth close to $4.3 million, comprising less than 0.1%% of its total 13F portfolio. On Point72 Asset Management’s heels is Renaissance Technologies, which holds a $4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish encompass Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Canyon Capital Advisors allocated the biggest weight to Acorda Therapeutics Inc (NASDAQ:ACOR), around 0.04% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to ACOR.

As one would reasonably expect, key hedge funds have been driving this bullishness. Canyon Capital Advisors, managed by Joshua Friedman and Mitchell Julis, created the biggest position in Acorda Therapeutics Inc (NASDAQ:ACOR). Canyon Capital Advisors had $1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.2 million position during the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Acorda Therapeutics Inc (NASDAQ:ACOR) but similarly valued. These stocks are T.A.T. Technologies Ltd. (NASDAQ:TATT), The Dixie Group Inc (NASDAQ:DXYN), Indonesia Energy Corporation Limited (NYSE:INDO), China Hgs Real Estate Inc (NASDAQ:HGSH), Income Opportunity Realty Investors, Inc. (NYSE:IOR), Sintx Technologies, Inc. (NASDAQ:SINT), and BSQUARE Corporation (NASDAQ:BSQR). This group of stocks’ market valuations match ACOR’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $9 million in ACOR’s case. The Dixie Group Inc (NASDAQ:DXYN) is the most popular stock in this table. On the other hand T.A.T. Technologies Ltd. (NASDAQ:TATT) is the least popular one with only 1 bullish hedge fund positions. Acorda Therapeutics Inc (NASDAQ:ACOR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ACOR is 60.6. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately ACOR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ACOR were disappointed as the stock returned -20.9% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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