The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 867 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2021. In this article we are going to take a look at smart money sentiment towards Arena Pharmaceuticals, Inc. (NASDAQ:ARNA).
Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) investors should be aware of an increase in hedge fund interest in recent months. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) was in 35 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that ARNA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Aaron Cowen of Suvretta Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now we’re going to take a look at the latest hedge fund action surrounding Arena Pharmaceuticals, Inc. (NASDAQ:ARNA).
Do Hedge Funds Think ARNA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ARNA over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Avoro Capital Advisors (venBio Select Advisor) held the most valuable stake in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), which was worth $204 million at the end of the third quarter. On the second spot was Alkeon Capital Management which amassed $103.7 million worth of shares. Farallon Capital, Great Point Partners, and Logos Capital 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 Great Point Partners allocated the biggest weight to Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), around 7.36% of its 13F portfolio. Integral Health Asset Management is also relatively very bullish on the stock, dishing out 5.14 percent of its 13F equity portfolio to ARNA.
As one would reasonably expect, some big names were breaking ground themselves. Logos Capital, managed by Arsani William, assembled the most valuable position in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). Logos Capital had $30.4 million invested in the company at the end of the quarter. Aaron Cowen’s Suvretta Capital Management also initiated a $30.2 million position during the quarter. The other funds with new positions in the stock are Efrem Kamen’s Pura Vida Investments, Bhagwan Jay Rao’s Integral Health Asset Management, and Louis Bacon’s Moore Global Investments.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) but similarly valued. These stocks are BRP Group, Inc. (NASDAQ:BRP), Ameris Bancorp (NASDAQ:ABCB), Karuna Therapeutics, Inc. (NASDAQ:KRTX), Walker & Dunlop Inc. (NYSE:WD), Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), Oscar Health, Inc. (NYSE:OSCR), and ACI Worldwide Inc (NASDAQ:ACIW). This group of stocks’ market caps are similar to ARNA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BRP | 21 | 194072 | 8 |
| ABCB | 15 | 36045 | 0 |
| KRTX | 19 | 398328 | 1 |
| WD | 15 | 151415 | 4 |
| KLIC | 28 | 322233 | -1 |
| OSCR | 17 | 947585 | 1 |
| ACIW | 28 | 570658 | 2 |
| Average | 20.4 | 374334 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $374 million. That figure was $620 million in ARNA’s case. Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) is the most popular stock in this table. On the other hand Ameris Bancorp (NASDAQ:ABCB) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) is more popular among hedge funds. Our overall hedge fund sentiment score for ARNA is 80.4. 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. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately ARNA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ARNA were disappointed as the stock returned -8.5% since the end of the third quarter (through 11/30) 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 most of these stocks already outperformed the market since 2019.
Follow Arena Pharmaceuticals Inc (NASDAQ:ARNA)
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Disclosure: None. This article was originally published at Insider Monkey.
