Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Ascendis Pharma A/S (NASDAQ:ASND) in this article.
Is ASND stock a buy? Ascendis Pharma A/S (NASDAQ:ASND) has experienced an increase in support from the world’s most elite money managers in recent months. Ascendis Pharma A/S (NASDAQ:ASND) was in 31 hedge funds’ portfolios at the end of December. The all time high for this statistic is 38. Our calculations also showed that ASND isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
At the moment there are tons of methods stock market investors have at their disposal to value stocks. A pair of the most under-the-radar methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite money managers can outperform the broader indices by a solid margin (see the details here).
Felix Baker of Baker Bros.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to check out the key hedge fund action regarding Ascendis Pharma A/S (NASDAQ:ASND).
Do Hedge Funds Think ASND Is A Good Stock To Buy Now?
At Q4’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. By comparison, 38 hedge funds held shares or bullish call options in ASND a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, RA Capital Management, managed by Peter Kolchinsky, holds the most valuable position in Ascendis Pharma A/S (NASDAQ:ASND). RA Capital Management has a $978.2 million position in the stock, comprising 13.7% of its 13F portfolio. On RA Capital Management’s heels is Julian Baker and Felix Baker of Baker Bros. Advisors, with a $590.4 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions comprise Behzad Aghazadeh’s Avoro Capital Advisors (venBio Select Advisor), Albert Cha and Frank Kung’s Vivo Capital and Farallon Capital. In terms of the portfolio weights assigned to each position RA Capital Management allocated the biggest weight to Ascendis Pharma A/S (NASDAQ:ASND), around 13.67% of its 13F portfolio. Vivo Capital is also relatively very bullish on the stock, designating 13.38 percent of its 13F equity portfolio to ASND.
Consequently, key hedge funds have jumped into Ascendis Pharma A/S (NASDAQ:ASND) headfirst. Lone Pine Capital, assembled the biggest position in Ascendis Pharma A/S (NASDAQ:ASND). Lone Pine Capital had $149.2 million invested in the company at the end of the quarter. Neil Shahrestani’s Ikarian Capital also made a $14.5 million investment in the stock during the quarter. The following funds were also among the new ASND investors: Steve Cohen’s Point72 Asset Management, Devesh Gandhi’s SilverArc Capital, and Michael Gelband’s ExodusPoint Capital.
Let’s go over hedge fund activity in other stocks similar to Ascendis Pharma A/S (NASDAQ:ASND). We will take a look at AMERCO (NASDAQ:UHAL), RealPage, Inc. (NASDAQ:RP), AptarGroup, Inc. (NYSE:ATR), A. O. Smith Corporation (NYSE:AOS), Melco Resorts & Entertainment Limited (NASDAQ:MLCO), Pentair plc (NYSE:PNR), and Aspen Technology, Inc. (NASDAQ:AZPN). This group of stocks’ market caps are similar to ASND’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UHAL | 21 | 540146 | 2 |
| RP | 48 | 1897711 | 9 |
| ATR | 20 | 271051 | -8 |
| AOS | 31 | 291962 | 1 |
| MLCO | 30 | 766350 | -4 |
| PNR | 29 | 664762 | -5 |
| AZPN | 29 | 1175533 | 3 |
| Average | 29.7 | 801074 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $801 million. That figure was $2830 million in ASND’s case. RealPage, Inc. (NASDAQ:RP) is the most popular stock in this table. On the other hand AptarGroup, Inc. (NYSE:ATR) is the least popular one with only 20 bullish hedge fund positions. Ascendis Pharma A/S (NASDAQ:ASND) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ASND is 51.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and beat the market again by 1.5 percentage points. Unfortunately ASND wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on ASND were disappointed as the stock returned -26% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
