Spark Therapeutics Inc (ONCE) and Other Profitable Healthcare Picks of Casdin Capital

At Insider Monkey, we track some 750 hedge funds and other institutional investors. We analyze their 13F filings and determine stocks that they are collectively bullish on, then we use some of these companies as part of our small-cap strategy. In addition, we calculate the returns of these funds, using our own methodology, which involves taking only long positions in companies with market caps over $1.0 billion. Even though this assessment of returns can differ from the actual returns generated by the fund in a particular quarter, we can still get an impression whether or not this funds’ stock picks are worth following.

One of the funds in our database is Casdin Capital, led by Eli Casdin. As of the end of June, this fund reported an equity portfolio worth over $100 million, which consisted mainly of healthcare stocks. Betting on the sector helped Casdin a lot as the fund managed to return 24% in the third quarter, according to our calculations.

In this article, we are going to take a closer look at four stocks that helped Casdin register significant gains between July and September.

Let’s start with Spark Therapeutics Inc (NADAQ:ONCE), which represented Casdin’s largest holding, worth $8.31 million and containing 162,500 shares at the end of June. The stock, which amassed 8.27% of the fund’s equity portfolio, surged by 17.47% during the third quarter. Overall, at the end of June, 16 funds racked by Insider Monkey held long positions in this stock, a change of 7% from the first quarter of 2016. Baker Bros. Advisors, managed by Julian Baker and Felix Baker, held the most valuable position in Spark Therapeutics Inc (NASDAQ:ONCE). Baker Bros. Advisors had a $67.4 million position in the stock, comprising 0.7% of its 13F portfolio. On Baker Bros. Advisors’s heels was Kris Jenner, Gordon Bussard, Graham McPhail of Rock Springs Capital Management, with a $31.2 million position. Moreover, James E. Flynn’s Deerfield Management created the most outsized position in Spark Therapeutics Inc (NASDAQ:ONCE) and Deerfield Management had $18.8 million invested in the company at the end of the quarter. Michael Hintze’s CQS Cayman LP also initiated a $6.9 million position during the second quarter.

Agios Pharmaceuticals Inc (NASDAQ:AGIO)‘s stock performed even better, having advanced by 26.06% in the third quarter. Heading into the quarter, Casdin held 187,500 shares worth $7.86 million. Heading into the third quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, down by five funds over the quarter. Dmitry Balyasny’s Balyasny Asset Management had the number one position in Agios Pharmaceuticals Inc (NASDAQ:AGIO), worth close to $13.6 million. It was followed by Baker Bros. Advisors, holding a $8.7 million position. On the other hand, Ken Greenberg and David Kim’s Ghost Tree Capital cut the biggest position of all the hedgies monitored by Insider Monkey, comprising an estimated $5.7 million in Agios Pharmaceuticals Inc (NASDAQ:AGIO)’s stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund cut about $1.2 million worth of shares.

Then there’s bluebird bio Inc (NASDAQ:BLUE), which was represented in Casdin’s equity portfolio by a $5.30 million stake containing 122,500 shares. Among the stocks covered in this article, bluebird registered the highest gains, as it appreciated by 56.57% between July and September, although it gave up the gains in the following months and is only 10% in the green year-to-date. At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock. Among them, Samuel Isaly’s OrbiMed Advisors  was the largest shareholder bluebird bio Inc (NASDAQ:BLUE), worth close to $51.3 million. The second most bullish fund was Great Point Partners, led by Jeffrey Jay and David Kroin, holding a $21.6 million position. Some other professional money managers that were bullish on bluebird bio Inc (NASDAQ:BLUE) consist of James E. Flynn’s Deerfield Management, Julian Baker and Felix Baker’s Baker Bros. Advisors and Dmitry Balyasny’s Balyasny Asset Management.

Finally, Evolent Health Inc (NYSE:EVH) was a new position in Casdin’s equity portfolio as the fund added 239,500 shares worth $5.60 million in the second quarter. In the following three months, the stock gained 28.23%. During the second quarter, the number of funds followed by our team remained unchanged at seven. Of the funds tracked by Insider Monkey, Pennant Capital Management, led by Alan Fournier, reported a 25.7 million position in Evolent Health Inc (NYSE:EVH). It was followed by Joseph Edelman’s Perceptive Advisors with a $16.8 million position. Some other peers with similar optimism about Evolent Health Inc (NYSE:EVH) comprise Richard Driehaus’s Driehaus Capital and Israel Englander’s Millennium Management.

Disclosure: none