Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Idera Pharmaceuticals Inc (NASDAQ:IDRA)’s stock has dropped by 24% in the first nine months, but during the third quarter alone shares haven’t seen a lot of action. In addition the hedge fund sentiment towards the stock remained unchanged and it was included in 14 hedge funds’ portfolios at the end of September. At the end of this article we will also compare IDRA to other stocks, including Culp, Inc. (NYSE:CFI), Vicor Corp (NASDAQ:VICR), and Blue Hills Bancorp Inc (NASDAQ:BHBK) to get a better sense of its popularity.
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Today there are tons of gauges stock market investors use to assess their stock investments. Two of the less utilized gauges are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outpace the broader indices by a solid amount (see the details here).
Now, let’s analyze the fresh action surrounding Idera Pharmaceuticals Inc (NASDAQ:IDRA).
How have hedgies been trading Idera Pharmaceuticals Inc (NASDAQ:IDRA)?
Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock. Among these, several funds accumulated substantial positions in the company. More specifically, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the number one position in Idera Pharmaceuticals Inc (NASDAQ:IDRA). Baker Bros. Advisors has a $23.4 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Kevin Kotler’s Broadfin Capital, with a $17.5 million position; 1% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish consist of William Leland Edwards’ Palo Alto Investors, Anand Parekh’s Alyeska Investment Group, and Steve Cohen’s Point72 Asset Management.
Because Idera Pharmaceuticals Inc (NASDAQ:IDRA) has witnessed falling interest from the smart money, it’s easy to see that there were a few hedgies that slashed their full holdings heading into Q4. Interestingly, Arthur B Cohen and Joseph Healey’s Healthcor Management LP dropped the biggest stake of all the hedgies tracked by Insider Monkey, comprising about $5 million in stock, and Malcolm Fairbairn’s Ascend Capital was right behind this move, as the fund sold off about $0.9 million worth of shares.
Let’s now review hedge fund activity in other stocks similar to Idera Pharmaceuticals Inc (NASDAQ:IDRA). We will take a look at Culp, Inc. (NYSE:CFI), Vicor Corp (NASDAQ:VICR), Blue Hills Bancorp Inc (NASDAQ:BHBK), and Sangamo Biosciences, Inc. (NASDAQ:SGMO). This group of stocks’ market valuations are closest to IDRA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CFI | 15 | 45947 | 1 |
| VICR | 11 | 15429 | -1 |
| BHBK | 10 | 25050 | 0 |
| SGMO | 19 | 66422 | -3 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $53 million in IDRA’s case. Sangamo Biosciences, Inc. (NASDAQ:SGMO) is the most popular stock in this table. On the other hand Blue Hills Bancorp Inc (NASDAQ:BHBK) is the least popular one with only 10 bullish hedge fund positions. Idera Pharmaceuticals Inc (NASDAQ:IDRA) is not the most popular stock in this group, but the hedge fund sentiment is close to the average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SGMO might be a better candidate to consider a long position.
