With the fourth-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was Akcea Therapeutics, Inc. (NASDAQ:AKCA).
Akcea Therapeutics, Inc. (NASDAQ:AKCA) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of December. 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 John Wiley & Sons Inc (NYSE:JW), Agios Pharmaceuticals Inc (NASDAQ:AGIO), and Inogen Inc (NASDAQ:INGN) to gather more data points.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a glance at the new hedge fund action regarding Akcea Therapeutics, Inc. (NASDAQ:AKCA).
How have hedgies been trading Akcea Therapeutics, Inc. (NASDAQ:AKCA)?
At Q4’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in AKCA over the last 14 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, EcoR1 Capital held the most valuable stake in Akcea Therapeutics, Inc. (NASDAQ:AKCA), which was worth $19.3 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $6.2 million worth of shares. Moreover, OZ Management, AQR Capital Management, and Two Sigma Advisors were also bullish on Akcea Therapeutics, Inc. (NASDAQ:AKCA), allocating a large percentage of their portfolios to this stock.
Seeing as Akcea Therapeutics, Inc. (NASDAQ:AKCA) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of fund managers who were dropping their entire stakes heading into Q3. Interestingly, Sander Gerber’s Hudson Bay Capital Management cut the largest stake of all the hedgies tracked by Insider Monkey, comprising an estimated $1.2 million in stock. Jerome Pfund and Michael Sjostrom’s fund, Sectoral Asset Management, also sold off its stock, about $0.4 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Akcea Therapeutics, Inc. (NASDAQ:AKCA) but similarly valued. These stocks are John Wiley & Sons Inc (NYSE:JW), Agios Pharmaceuticals Inc (NASDAQ:AGIO), Inogen Inc (NASDAQ:INGN), and Cedar Fair, L.P. (NYSE:FUN). This group of stocks’ market caps are similar to AKCA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JW | 17 | 105456 | 2 |
| AGIO | 17 | 205975 | -5 |
| INGN | 25 | 379083 | 4 |
| FUN | 10 | 39793 | 3 |
| Average | 17.25 | 182577 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $30 million in AKCA’s case. Inogen Inc (NASDAQ:INGN) is the most popular stock in this table. On the other hand Cedar Fair, L.P. (NYSE:FUN) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Akcea Therapeutics, Inc. (NASDAQ:AKCA) is even less popular than FUN. Hedge funds dodged a bullet by taking a bearish stance towards AKCA. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately AKCA wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); AKCA investors were disappointed as the stock returned -10.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
