Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 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’ recent losses in Facebook. Let’s take a closer look at what the funds we track think about Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) in this article.
Is Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) a healthy stock for your portfolio? Hedge funds are getting more bullish. The number of long hedge fund bets advanced by 1 lately. Our calculations also showed that arwr isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s view the new hedge fund action encompassing Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR).
What does the smart money think about Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR)?
Heading into the fourth quarter of 2018, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. By comparison, 9 hedge funds held shares or bullish call options in ARWR heading into 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.
Among these funds, Adage Capital Management held the most valuable stake in Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR), which was worth $17.3 million at the end of the third quarter. On the second spot was venBio Select Advisor which amassed $16.3 million worth of shares. Moreover, Perceptive Advisors, Baker Bros. Advisors, and Millennium Management were also bullish on Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers have jumped into Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) headfirst. Baker Bros. Advisors, managed by Julian Baker and Felix Baker, assembled the largest position in Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR). Baker Bros. Advisors had $5.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $5.2 million position during the quarter. The following funds were also among the new ARWR investors: Michael Castor’s Sio Capital, Thomas Bailard’s Bailard Inc, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) but similarly valued. We will take a look at Builders FirstSource, Inc. (NASDAQ:BLDR), Everbridge, Inc. (NASDAQ:EVBG), Fabrinet (NYSE:FN), and FS Investment Corporation (NYSE:FSIC). This group of stocks’ market valuations are closest to ARWR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BLDR | 37 | 406632 | 3 |
| EVBG | 19 | 198824 | -1 |
| FN | 15 | 116270 | 5 |
| FSIC | 9 | 21686 | 2 |
| Average | 20 | 185853 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $186 million. That figure was $60 million in ARWR’s case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand FS Investment Corporation (NYSE:FSIC) is the least popular one with only 9 bullish hedge fund positions. Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BLDR might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
