With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD).
ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) has seen a decrease in enthusiasm from smart money recently. ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic is 44. Our calculations also showed that ACAD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the eyes of most market participants, hedge funds are seen as unimportant, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, Our experts look at the crème de la crème of this group, approximately 850 funds. Most estimates calculate that this group of people direct the majority of the hedge fund industry’s total capital, and by tracking their inimitable picks, Insider Monkey has figured out various investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Robert Pohly of Samlyn Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 latest hedge fund action encompassing ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD).
Do Hedge Funds Think ACAD Is A Good Stock To Buy Now?
At second quarter’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -36% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ACAD over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baker Bros. Advisors held the most valuable stake in ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), which was worth $1022.2 million at the end of the second quarter. On the second spot was D E Shaw which amassed $116.2 million worth of shares. Partner Fund Management, Avoro Capital Advisors (venBio Select Advisor), and Palo Alto Investors 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 Baker Bros. Advisors allocated the biggest weight to ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), around 4.49% of its 13F portfolio. Palo Alto Investors is also relatively very bullish on the stock, setting aside 3.14 percent of its 13F equity portfolio to ACAD.
Since ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) has faced a decline in interest from hedge fund managers, it’s easy to see that there exists a select few fund managers who sold off their positions entirely last quarter. Intriguingly, Joseph Edelman’s Perceptive Advisors cut the biggest position of the 750 funds watched by Insider Monkey, valued at about $36.4 million in stock. Arthur B Cohen and Joseph Healey’s fund, Healthcor Management LP, also said goodbye to its stock, about $23.2 million worth. These moves are interesting, as total hedge fund interest dropped by 12 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). We will take a look at Cushman & Wakefield plc (NYSE:CWK), Ormat Technologies, Inc. (NYSE:ORA), Freedom Holding Corp. (NASDAQ:FRHC), National Storage Affiliates Trust (NYSE:NSA), Ambarella Inc (NASDAQ:AMBA), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), and Schneider National, Inc. (NYSE:SNDR). This group of stocks’ market caps match ACAD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CWK | 23 | 245483 | 4 |
| ORA | 21 | 242956 | 4 |
| FRHC | 13 | 64432 | 1 |
| NSA | 20 | 208028 | 6 |
| AMBA | 37 | 341764 | 2 |
| AJRD | 29 | 845940 | -1 |
| SNDR | 20 | 122133 | 1 |
| Average | 23.3 | 295819 | 2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $296 million. That figure was $1390 million in ACAD’s case. Ambarella Inc (NASDAQ:AMBA) is the most popular stock in this table. On the other hand Freedom Holding Corp. (NASDAQ:FRHC) is the least popular one with only 13 bullish hedge fund positions. ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACAD is 24. 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 negative signal and 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately ACAD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ACAD investors were disappointed as the stock returned -24% since the end of June (through 10/22) 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 in 2021.
Follow Acadia Pharmaceuticals Inc (NASDAQ:ACAD)
Follow Acadia Pharmaceuticals Inc (NASDAQ:ACAD)
Suggested Articles:
- 10 Best Chinese Stocks To Buy Now
- 10 Best Whiskey and Alcohol Stocks to Buy in 2021
- 11 Best Canadian Stocks to Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
