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Billionaire Steve Cohen Bullish Again (And Now More Than Ever) On Achillion Pharmaceuticals, Inc. (ACHN)

Mere months after closing its previously held stake in the company, Steve Cohen’s Point72 Asset Management appears to be more bullish than ever on Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). The billionaire’s family office reported in a 13G filing with the SEC this week that it now owns a 5% stake in the biopharmaceutical company consisting of just under 5.88 million shares. The value of the stake currently stands at $58.15 million, making it one of the investor’s top healthcare stock picks now, behind the likes of Gilead Sciences Inc. (NASDAQ:GILD) and ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD).


Cohen converted his 22-year-old hedge fund S.A.C Capital Advisors into its current iteration as the family office Point72 Asset Management, last year. The family office manages the considerable wealth Cohen amassed during his time at the head of S.A.C, and prior to that, heading his own trading division at Gruntal & Co., in addition to the assets of its other employees. That employee headcount has not shrunk upon his firm’s closure to outside investors; in fact Point72 has added about 100 employees since then and still operates offices in New York, Hong Kong, Singapore, and Tokyo, in addition to its headquarters in Stamford, Connecticut. All told, the firm’s public equity portfolio stood at $14.67 billion as of March 31 and its returns for the year stood at 8.5% through the end of the first week of May according to CNBC’s Kate Kelly.

We don’t just track the latest moves of hedge funds and other investment firms. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testing in August 2012, the strategy worked splendidly, outperforming the market every year and returning over 144%, which is more than 84 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).

This latest move from Cohen is particularly interesting given the fact that he had just closed a position in the company during the first quarter, which consisted of 621,900 shares as of the end of 2014. That said, it’s also not unique; Cohen has previously held Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) on more than one other occasion and ended up closing the position each time, only to re-open it again shortly afterwards. However, those positions were always much smaller in size than his current one.

One possible explanation for the current scenario is that Cohen sold out of the stock sometime in January as it was cresting towards its five year high, and jumped at the opportunity to buy back in again at a lower price point as the stock fell by 38% from January 23 through the end of March. However, we don’t know precisely when Cohen sold his shares in the first quarter, so this scenario may not entirely apply.

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