The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).
Hedge fund interest in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Envision Healthcare Holdings Inc (NYSE:EVHC), WellCare Health Plans, Inc. (NYSE:WCG), and Patterson Companies, Inc. (NASDAQ:PDCO) to gather more data points.
Follow Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY)
Follow Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a peek at the new action surrounding Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).
What have hedge funds been doing with Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)?
Heading into the fourth quarter of 2016, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the second quarter of 2016. The table below displays the number of hedge funds with bullish ALNY positions over the last 5 quarters.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Blue Ridge Capital, managed by billionaire John Griffin, holds the largest position in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). Blue Ridge Capital has a $89.5 million position in the stock, comprising 1.1% of its 13F portfolio. The second largest stake is held by Slate Path Capital, managed by David Greenspan, which holds a $83 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish include Roberto Mignone’s Bridger Management, Joel Ramin’s 12 West Capital Management and Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital. We should note that none of these hedge funds were among our list of the 100 best performing hedge funds.
Judging by the fact that Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has experienced falling interest from the smart money, it’s safe to say that there was a specific group of funds that decided to sell off their full holdings last quarter. At the top of the heap, James E. Flynn’s Deerfield Management dropped the largest stake of the “upper crust” of funds monitored by Insider Monkey, valued at close to $18.6 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also sold off its stock, about $1.9 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
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 Envision Healthcare Holdings Inc (NYSE:EVHC), WellCare Health Plans, Inc. (NYSE:WCG), Patterson Companies, Inc. (NASDAQ:PDCO), and Phillips 66 Partners LP (NYSE:PSXP). This group of stocks’ market values are closest to ALNY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVHC | 34 | 722346 | -9 |
| WCG | 31 | 649423 | 1 |
| PDCO | 19 | 186650 | -3 |
| PSXP | 8 | 42019 | 3 |
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $400 million. That figure was $389 million in ALNY’s case. Envision Healthcare Holdings Inc (NYSE:EVHC) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only 8 bullish hedge fund positions. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is not the most popular stock in this group but hedge fund interest is still above 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 EVHC might be a better candidate to consider taking a long position in.
