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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN).
Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) shareholders have witnessed an increase in support from the world’s most elite money managers of late. ALXN was in 56 hedge funds’ portfolios at the end of March. There were 48 hedge funds in our database with ALXN positions at the end of the previous quarter. Our calculations also showed that ALXN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Aaron Cowen of Suvretta Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the new hedge fund action encompassing Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN).
What have hedge funds been doing with Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)?
Heading into the second quarter of 2020, a total of 56 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ALXN over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) was held by Baker Bros. Advisors, which reported holding $786.6 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $337.9 million position. Other investors bullish on the company included Citadel Investment Group, AQR Capital Management, and OrbiMed Advisors. In terms of the portfolio weights assigned to each position Camber Capital Management allocated the biggest weight to Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), around 8.85% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, setting aside 5.88 percent of its 13F equity portfolio to ALXN.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Suvretta Capital Management, managed by Aaron Cowen, created the biggest position in Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN). Suvretta Capital Management had $49.5 million invested in the company at the end of the quarter. David Rosen’s Rubric Capital Management also made a $22.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund, Henrik Rhenman’s Rhenman & Partners Asset Management, and Arthur B Cohen and Joseph Healey’s Healthcor Management LP.
Let’s also examine hedge fund activity in other stocks similar to Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN). These stocks are ANSYS, Inc. (NASDAQ:ANSS), KKR & Co Inc. (NYSE:KKR), Edison International (NYSE:EIX), and Seattle Genetics, Inc. (NASDAQ:SGEN). This group of stocks’ market values are similar to ALXN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ANSS | 31 | 1059903 | -2 |
| KKR | 48 | 2694120 | -8 |
| EIX | 29 | 1046389 | -5 |
| SGEN | 27 | 6153689 | -9 |
| Average | 33.75 | 2738525 | -6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.75 hedge funds with bullish positions and the average amount invested in these stocks was $2739 million. That figure was $3058 million in ALXN’s case. KKR & Co Inc. (NYSE:KKR) is the most popular stock in this table. On the other hand Seattle Genetics, Inc. (NASDAQ:SGEN) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. Unfortunately ALXN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ALXN were disappointed as the stock returned 13% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
