Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Agios Pharmaceuticals Inc (NASDAQ:AGIO).
Agios Pharmaceuticals Inc investors should be aware of a decrease in enthusiasm from smart money recently. At the end of this article we will also compare AGIO to other stocks, including United Bankshares, Inc. (NASDAQ:UBSI), Black Stone Minerals LP (NYSE:BSM), and Fair Isaac Corporation (NYSE:FICO) to get a better sense of its popularity.
Follow Agios Pharmaceuticals Inc. (NASDAQ:AGIO)
Follow Agios Pharmaceuticals Inc. (NASDAQ:AGIO)
In the financial world there are dozens of indicators market participants can use to assess publicly traded companies. A couple of the less utilized indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform the market by a very impressive amount (see the details here).
With all of this in mind, let’s review the new action regarding Agios Pharmaceuticals Inc (NASDAQ:AGIO).
How have hedgies been trading Agios Pharmaceuticals Inc (NASDAQ:AGIO)?
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 44% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Dmitry Balyasny’s Balyasny Asset Management has the number one position in Agios Pharmaceuticals Inc (NASDAQ:AGIO), worth close to $8.9 million, comprising 0.1% of its total 13F portfolio. On Balyasny Asset Management’s heels is Sabby Capital, managed by Hal Mintz, which holds a $7.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish encompass Julian Baker and Felix Baker’s Baker Bros. Advisors and Cliff Asness’s AQR Capital Management.
Seeing as Agios Pharmaceuticals Inc (NASDAQ:AGIO) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedgies that slashed their entire stakes last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the biggest investment of the “upper crust” of funds tracked by Insider Monkey, comprising close to $4.3 million in stock, and Drew Cupps of Cupps Capital Management was right behind this move, as the fund dropped about $2.2 million worth of stock. These transactions are intriguing to say the least, as total hedge fund interest fell by 7 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Agios Pharmaceuticals Inc (NASDAQ:AGIO) but similarly valued. We will take a look at United Bankshares, Inc. (NASDAQ:UBSI), Black Stone Minerals LP (NYSE:BSM), Fair Isaac Corporation (NYSE:FICO), and American National Insurance Company (NASDAQ:ANAT). This group of stocks’ market values are closest to AGIO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UBSI | 7 | 29465 | 1 |
| BSM | 4 | 70758 | -1 |
| FICO | 19 | 268709 | 1 |
| ANAT | 16 | 43790 | 3 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $103 million. The figure in the case of AGIO is just $31 million. Fair Isaac Corporation (NYSE:FICO) is the most popular stock in this table, whereas Black Stone Minerals LP (NYSE:BSM) is the least popular one with only 4 bullish hedge fund positions. Agios Pharmaceuticals Inc (NASDAQ:AGIO) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FICO might be a better candidate to consider a long position.
