Should You Buy Aerie Pharmaceuticals Inc (AERI)?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Aerie Pharmaceuticals Inc (NASDAQ:AERI) .

Is Aerie Pharmaceuticals Inc (NASDAQ:AERI) a buy right now? Hedge funds are thoroughly in an optimistic mood. The number of long hedge fund investments inched up by 14 lately. AERIwas in 31 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with AERI positions at the end of the previous quarter. 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 James River Group Holdings Ltd (NASDAQ:JRVR), Amicus Therapeutics, Inc. (NASDAQ:FOLD), and Atlantic Tele-Network, Inc. (NASDAQ:ATNI) to gather more data points.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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Keeping this in mind, let’s take a gander at the latest action surrounding Aerie Pharmaceuticals Inc (NASDAQ:AERI).

How are hedge funds trading Aerie Pharmaceuticals Inc (NASDAQ:AERI)?

At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a boost of 82% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in AERI at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Christopher James’s Partner Fund Management has the biggest position in Aerie Pharmaceuticals Inc (NASDAQ:AERI), worth close to $74.2 million, amounting to 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $62.3 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions contain James E. Flynn’s Deerfield Management, Samuel Isaly’s OrbiMed Advisors and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.