Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Agios Pharmaceuticals Inc (NASDAQ:AGIO) based on that data.
Agios Pharmaceuticals Inc (NASDAQ:AGIO) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 23 hedge funds’ portfolios at the end of the first quarter of 2020. 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 Euronav NV (NYSE:EURN), Allogene Therapeutics, Inc. (NASDAQ:ALLO), and NovaGold Resources Inc. (NYSE:NG) to gather more data points. Our calculations also showed that AGIO 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Samuel Isaly of OrbiMed Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a glance at the latest hedge fund action regarding Agios Pharmaceuticals Inc (NASDAQ:AGIO).
Hedge fund activity in Agios Pharmaceuticals Inc (NASDAQ:AGIO)
At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AGIO over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, OrbiMed Advisors, managed by Samuel Isaly, holds the most valuable position in Agios Pharmaceuticals Inc (NASDAQ:AGIO). OrbiMed Advisors has a $58.6 million position in the stock, comprising 1% of its 13F portfolio. Coming in second is Farallon Capital, which holds a $44.4 million position; 0.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish comprise Eli Casdin’s Casdin Capital, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Joseph Edelman’s Perceptive Advisors. In terms of the portfolio weights assigned to each position Casdin Capital allocated the biggest weight to Agios Pharmaceuticals Inc (NASDAQ:AGIO), around 4.03% of its 13F portfolio. Integral Health Asset Management is also relatively very bullish on the stock, setting aside 2.34 percent of its 13F equity portfolio to AGIO.
Because Agios Pharmaceuticals Inc (NASDAQ:AGIO) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of funds that elected to cut their entire stakes heading into Q4. It’s worth mentioning that Eric Bannasch’s Cadian Capital said goodbye to the largest position of the 750 funds watched by Insider Monkey, worth close to $3.6 million in stock, and Sander Gerber’s Hudson Bay Capital Management was right behind this move, as the fund cut about $3.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Agios Pharmaceuticals Inc (NASDAQ:AGIO). We will take a look at Euronav NV (NYSE:EURN), Allogene Therapeutics, Inc. (NASDAQ:ALLO), NovaGold Resources Inc. (NYSE:NG), and Corelogic Inc (NYSE:CLGX). This group of stocks’ market valuations are closest to AGIO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EURN | 33 | 236366 | 5 |
| ALLO | 12 | 101735 | 0 |
| NG | 19 | 297032 | 3 |
| CLGX | 31 | 253322 | 3 |
| Average | 23.75 | 222114 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $222 million. That figure was $304 million in AGIO’s case. Euronav NV (NYSE:EURN) is the most popular stock in this table. On the other hand Allogene Therapeutics, Inc. (NASDAQ:ALLO) is the least popular one with only 12 bullish hedge fund positions. Agios Pharmaceuticals Inc (NASDAQ:AGIO) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on AGIO as the stock returned 48.7% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
