Is Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) was in 26 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. DRNA investors should be aware of a decrease in hedge fund interest recently. There were 27 hedge funds in our database with DRNA positions at the end of the second quarter. Our calculations also showed that DRNA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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 let’s take a gander at the key hedge fund action surrounding Dicerna Pharmaceuticals Inc (NASDAQ:DRNA).
Lee Ainslie of Maverick Capital
Do Hedge Funds Think DRNA Is A Good Stock To Buy Now?
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in DRNA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Aquilo Capital Management was the largest shareholder of Dicerna Pharmaceuticals Inc (NASDAQ:DRNA), with a stake worth $49.5 million reported as of the end of September. Trailing Aquilo Capital Management was Woodline Partners, which amassed a stake valued at $27.3 million. Maverick Capital, Polar Capital, and Commodore 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 Aquilo Capital Management allocated the biggest weight to Dicerna Pharmaceuticals Inc (NASDAQ:DRNA), around 8.99% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, dishing out 6.87 percent of its 13F equity portfolio to DRNA.
Seeing as Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds that slashed their full holdings last quarter. It’s worth mentioning that Joseph Edelman’s Perceptive Advisors sold off the largest position of the “upper crust” of funds followed by Insider Monkey, comprising about $29.9 million in stock. Catherine D. Wood’s fund, ARK Investment Management, also dumped its stock, about $12.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) but similarly valued. We will take a look at NBT Bancorp Inc. (NASDAQ:NBTB), Intapp Inc. (NASDAQ:INTA), PBF Energy Inc (NYSE:PBF), Stock Yards Bancorp, Inc. (NASDAQ:SYBT), PureCycle Technologies, Inc. (NASDAQ:PCT), RadNet Inc. (NASDAQ:RDNT), and Veris Residential, Inc. (NYSE:CLI). This group of stocks’ market valuations are closest to DRNA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NBTB | 13 | 17533 | 4 |
| INTA | 12 | 21351 | -9 |
| PBF | 18 | 68474 | 1 |
| SYBT | 3 | 2197 | -5 |
| PCT | 25 | 381085 | 3 |
| RDNT | 19 | 109205 | 2 |
| CLI | 11 | 42468 | -6 |
| Average | 14.4 | 91759 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $271 million in DRNA’s case. PureCycle Technologies, Inc. (NASDAQ:PCT) is the most popular stock in this table. On the other hand Stock Yards Bancorp, Inc. (NASDAQ:SYBT) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) is more popular among hedge funds. Our overall hedge fund sentiment score for DRNA is 76.3. 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 returned 31.1% in 2021 through December 9th but still managed to beat the market by 5.1 percentage points. Hedge funds were also right about betting on DRNA as the stock returned 88.1% since the end of September (through 12/9) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
