What Do Hedge Funds Think of Achillion Pharmaceuticals, Inc. (ACHN)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) a sound investment now? Hedge funds are reducing their bets on the stock. The number of long hedge fund positions were trimmed by 1 lately. At the end of this article we will also compare ACHN to other stocks including Dynavax Technologies Corporation (NASDAQ:DVAX), Infoblox Inc (NYSE:BLOX), and Evolent Health Inc (NYSE:EVH) to get a better sense of its popularity.

If you’d ask most shareholders, hedge funds are seen as underperforming, old financial vehicles of years past. While there are greater than an 8000 funds in operation at the moment, Our researchers hone in on the elite of this club, approximately 700 funds. It is estimated that this group of investors direct the majority of the smart money’s total asset base, and by monitoring their highest performing equity investments, Insider Monkey has unearthed many investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, we’re going to check out the key action surrounding Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN).

How have hedgies been trading Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN)?

Heading into Q4, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, RA Capital Management, managed by Peter Kolchinsky, holds the number one position in Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). RA Capital Management has a $81.1 million position in the stock, comprising 11.6% of its 13F portfolio. On RA Capital Management’s heels is Point72 Asset Management, managed by Steve Cohen, which holds a $67.5 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism encompass Samuel Isaly’s OrbiMed Advisors, Rob Citrone’s Discovery Capital Management and Julian Baker and Felix Baker’s Baker Bros. Advisors.

Judging by the fact that Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers who were dropping their entire stakes last quarter. Intriguingly, Glenn Russell Dubin’s Highbridge Capital Management dropped the largest investment of all the hedgies watched by Insider Monkey, totaling an estimated $2.6 million in stock, and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management was right behind this move, as the fund cut about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). These stocks are Dynavax Technologies Corporation (NASDAQ:DVAX), Infoblox Inc (NYSE:BLOX), Evolent Health Inc (NYSE:EVH), and Genesis Healthcare Inc (NYSE:GEN). This group of stocks’ market values match ACHN’s market value.

As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $270 million in ACHN’s case. Dynavax Technologies Corporation (NASDAQ:DVAX) is the most popular stock in this table. On the other hand Evolent Health Inc (NYSE:EVH) is the least popular one with only 11 bullish hedge fund positions. Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) 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 DVAX might be a better candidate to consider a long position.