Hedge Funds Aren’t Crazy About Alnylam Pharmaceuticals, Inc. (ALNY) Anymore

Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.

Is Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) undervalued? Hedge funds are getting less optimistic. The number of bullish hedge fund bets were cut by 6 lately. At the end of this article we will also compare ALNY to other stocks, including LG Display Co Ltd. (ADR) (NYSE:LPL), Apollo Global Management LLC (NYSE:APO), and SS and C Technologies Holdings Inc (NASDAQ:SSNC) to get a better sense of its popularity.

In the 21st century investor’s toolkit there are many metrics shareholders have at their disposal to evaluate stocks. Two of the most underrated metrics are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can beat their index-focused peers by a very impressive amount (see the details here).

With all of this in mind, we’re going to take a look at the new action surrounding Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).

How have hedgies been trading Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)?

Heading into Q4, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 18% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Blue Ridge Capital, managed by John Griffin, holds the largest position in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). Blue Ridge Capital has a $86.4 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is Bridger Management, led by Roberto Mignone, holding a $57.2 million position; 3.9% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish comprise Joel Ramin’s 12 West Capital Management, David Greenspan’s Slate Path Capital and Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital.

Due to the fact that Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of funds that slashed their positions entirely last quarter. At the top of the heap, Jim Simons’ Renaissance Technologies dumped the largest stake of the “upper crust” of funds watched by Insider Monkey, comprising about $12.3 million in stock, and Jacob Gottlieb’s Visium Asset Management was right behind this move, as the fund dumped about $11.2 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest fell by 6 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). We will take a look at LG Display Co Ltd. (ADR) (NYSE:LPL), Apollo Global Management LLC (NYSE:APO), SS and C Technologies Holdings Inc (NASDAQ:SSNC), and Qorvo Inc (NASDAQ:QRVO). This group of stocks’ market caps are closest to ALNY’s market cap.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $411 million. That figure was $397 million in ALNY’s case. SS and C Technologies Holdings Inc (NASDAQ:SSNC) is the most popular stock in this table. On the other hand LG Display Co Ltd. (ADR) (NYSE:LPL) is the least popular one with only 13 bullish hedge fund positions. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SSNC might be a better candidate to consider a long position.