Life science is turning out to be an industry sector that most hedgies are convinced will outperform in the near future. In the last few days we have seen multiple hedge funds increasing their stakes in pharmaceutical and life sciences. So, it doesn’t come as a surprise that Steve Cohen’s family office, Point72 Asset Management, is also going big on a pharmaceutical stock. A recent filing with Securities and Exchange Commission (SEC) shows that Point72 Asset Management increased its stake in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) to over 1.39 million shares from the over 923,000 shares it held earlier. Point72 Asset Management’s stake in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) is passive and currently constitutes around 4.4% of all common stock of the company.
Cohen founded SAC Capital Advisors in 1992, which went on to become one of the most well known hedge funds and at its peak managed over $14 billion in assets. After being convicted of insider trading charges last year and paying $1.2 billion in fine, Cohen shut down SAC Capital Advisors and formed Point72 Asset Management, a family office that manages his own money. SAC Capital was one of the most successful hedge funds, averaging 25% annual returns after fees during its 20 plus years of existence.
Other top holdings of Point72 Asset Management include Baker Hughes Incorporated (NYSE:BHI) and Whiting Petroleum Corp (NYSE:WLL), both of which have gone through significant corrections recently. Baker Hughes Incorporated (NYSE:BHI) fell to $53 levels from the above $65 levels it used to trade in September, while Whiting Petroleum Corp (NYSE:WLL) declined from its August 29 high of $92.92 to current levels of $55.
Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) is a $850 million market cap, biopharmaceutical company that develops therapies for patients with debilitating rare diseases. For the second quarter ending June 30, Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) reported revenue of $36 million and a negative EPS of $0.33, compared to revenue of $6.4 million and negative EPS of $0.66 in the same quarter, last year. Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)’s stock has dropped by more than 60% during the last year. It currently trades at around 14 times its forward earnings; the average trailing P/E of pharmaceutical industry is 28.73. Analysts are also upbeat on the stock, with a consensus rating of ‘Overweight’ and average price target of $66.
Other institutional investors that are bullish on Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) Kevin Kotler’s Broadfin Capital and Israel Englander’s Millennium Management. During second quarter of 2014, Broadfin Capital increased its stake by 132% to over 800,000 shares and Millennium Management by 48% to over 300,000 shares.
Since Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)’s shares lost a lot of ground during the last year, it might be a reason that hedge funds are now finding the stock lucrative for investments. With institutional investors putting in their money and the stock trading near its yearly lows, Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) offers a good risk-reward opportunity for going long.
Disclosure: None
