Hedge Funds Aren’t Crazy About Dicerna Pharmaceuticals Inc (DRNA) Anymore

As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) in this article.

Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) was in 9 hedge funds’ portfolios at the end of September. Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) has experienced a decrease in hedge fund interest of late. There were 12 hedge funds in our database with Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) holdings at the end of the previous quarter. The hedge funds might have done the right thing, considering a drop of 41.15% in the share prices of Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) during the third quarter. We will cover hedge funds that had positions in the company, at the end of the previous quarter.

The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Fibrocell Science Inc (NASDAQ:FCSC), TriplePoint Venture Growth BDC Corp (NYSE:TPVG), and TrovaGene Inc (NASDAQ:TROV) to gather more data points.

In the financial world, there are a large number of metrics stock traders can use to grade their holdings. A duo of the most useful metrics are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best investment managers can outpace the market by a very impressive amount (see the details here).

Keeping this in mind, we’re going to review the latest action regarding Dicerna Pharmaceuticals Inc (NASDAQ:DRNA).

What have hedge funds been doing with Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)?

Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 25% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, RA Capital Management, managed by Peter Kolchinsky, holds the biggest position in Dicerna Pharmaceuticals Inc (NASDAQ:DRNA). RA Capital Management has a $19.9 million position in the stock, comprising 2.9% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, managed by Israel Englander, which holds a $2.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism contain William Leland Edwards’s Palo Alto Investors, Bihua Chen’s Cormorant Asset Management, and Nathan Fischel’s DAFNA Capital Management.

Seeing as Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there were a few hedgies who sold off their positions entirely by the end of the third quarter. Interestingly, Samuel Isaly’s OrbiMed Advisors cut the biggest position of all the hedgies watched by Insider Monkey, comprising an estimated $2 million in stock, and James Dondero’s Highland Capital Management was right behind this move, as the fund cut about $1.9 million worth of shares. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to Dicerna Pharmaceuticals Inc (NASDAQ:DRNA). We will take a look at Fibrocell Science Inc (NASDAQ:FCSC), TriplePoint Venture Growth BDC Corp (NYSE:TPVG), TrovaGene Inc (NASDAQ:TROV), and Tobira Therapeutics Inc (NASDAQ:TBRA). All of these stocks’ market caps are closest to Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)’s market cap.

As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $30 million in Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)’s case. TriplePoint Venture Growth BDC Corp (NYSE:TPVG) is the most popular stock in this table. On the other hand, Fibrocell Science Inc (NASDAQ:FCSC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks, Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.