The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Akebia Therapeutics Inc (NASDAQ:AKBA) based on those filings.
Akebia Therapeutics Inc (NASDAQ:AKBA) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. AKBA was in 18 hedge funds’ portfolios at the end of March. There were 16 hedge funds in our database with AKBA holdings at the end of the previous quarter. Our calculations also showed that AKBA isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
In the eyes of most market participants, hedge funds are viewed as unimportant, old financial tools of the past. While there are more than 8000 funds in operation at present, Our experts look at the elite of this group, about 850 funds. These investment experts handle most of all hedge funds’ total asset base, and by shadowing their inimitable stock picks, Insider Monkey has deciphered many investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Seth Klarman of Baupost Group
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the fresh hedge fund action surrounding Akebia Therapeutics Inc (NASDAQ:AKBA).
Hedge fund activity in Akebia Therapeutics Inc (NASDAQ:AKBA)
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AKBA over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Baupost Group was the largest shareholder of Akebia Therapeutics Inc (NASDAQ:AKBA), with a stake worth $132.9 million reported as of the end of September. Trailing Baupost Group was Consonance Capital Management, which amassed a stake valued at $54 million. Nantahala Capital Management, Abrams Capital Management, and Point72 Asset Management 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 Consonance Capital Management allocated the biggest weight to Akebia Therapeutics Inc (NASDAQ:AKBA), around 4.02% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, designating 2.7 percent of its 13F equity portfolio to AKBA.
As aggregate interest increased, key hedge funds have jumped into Akebia Therapeutics Inc (NASDAQ:AKBA) headfirst. Consonance Capital Management, managed by Mitchell Blutt, assembled the most outsized position in Akebia Therapeutics Inc (NASDAQ:AKBA). Consonance Capital Management had $54 million invested in the company at the end of the quarter. Thomas Steyer (founder)’s Farallon Capital also made a $9.5 million investment in the stock during the quarter. The other funds with brand new AKBA positions are Bhagwan Jay Rao’s Integral Health Asset Management, David M. Knott’s Dorset Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s also examine hedge fund activity in other stocks similar to Akebia Therapeutics Inc (NASDAQ:AKBA). These stocks are JELD-WEN Holding, Inc. (NYSE:JELD), Methode Electronics Inc. (NYSE:MEI), Meritor Inc (NYSE:MTOR), and CSW Industrials, Inc. (NASDAQ:CSWI). This group of stocks’ market caps match AKBA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JELD | 20 | 144013 | -9 |
| MEI | 13 | 71718 | -1 |
| MTOR | 17 | 166288 | -12 |
| CSWI | 16 | 32007 | 0 |
| Average | 16.5 | 103507 | -5.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $341 million in AKBA’s case. JELD-WEN Holding, Inc. (NYSE:JELD) is the most popular stock in this table. On the other hand Methode Electronics Inc. (NYSE:MEI) is the least popular one with only 13 bullish hedge fund positions. Akebia Therapeutics Inc (NASDAQ:AKBA) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on AKBA as the stock returned 65.6% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
