The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) a buy right now? Money managers are getting more bullish. The number of long hedge fund bets moved up by 9 lately. Our calculations also showed that ALNY isn’t among the 30 most popular stocks among hedge funds (see the video below). ALNY was in 35 hedge funds’ portfolios at the end of June. There were 26 hedge funds in our database with ALNY positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the new hedge fund action surrounding Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).
Hedge fund activity in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)
Heading into the third quarter of 2019, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, a change of 35% from one quarter earlier. By comparison, 35 hedge funds held shares or bullish call options in ALNY a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) was held by Maverick Capital, which reported holding $307.4 million worth of stock at the end of March. It was followed by Farallon Capital with a $79.8 million position. Other investors bullish on the company included Citadel Investment Group, 12 West Capital Management, and Casdin Capital.
As industrywide interest jumped, some big names have been driving this bullishness. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, established the largest position in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). Healthcor Management LP had $34 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $28.9 million investment in the stock during the quarter. The following funds were also among the new ALNY investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Israel Englander’s Millennium Management, and Anand Parekh’s Alyeska Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) but similarly valued. These stocks are Post Holdings Inc (NYSE:POST), Aurora Cannabis Inc. (NYSE:ACB), Ares Capital Corporation (NASDAQ:ARCC), and Kimco Realty Corp (NYSE:KIM). All of these stocks’ market caps match ALNY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| POST | 26 | 1506924 | -1 |
| ACB | 10 | 28795 | -1 |
| ARCC | 23 | 239409 | 1 |
| KIM | 19 | 112522 | 8 |
| Average | 19.5 | 471913 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $472 million. That figure was $957 million in ALNY’s case. Post Holdings Inc (NYSE:POST) is the most popular stock in this table. On the other hand Aurora Cannabis Inc. (NYSE:ACB) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on ALNY as the stock returned 10.8% during Q3 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.
Disclosure: None. This article was originally published at Insider Monkey.
