The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) from the perspective of those successful funds.
Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) was in 11 hedge funds’ portfolios at the end of September. DRNA investors should pay attention to an increase in enthusiasm from smart money lately. There were 11 hedge funds in our database with DRNA holdings at the end of September. At the end of this article we will also compare DRNA to other stocks including Assembly Biosciences Inc (NASDAQ:ASMB), The McClatchy Company (NYSE:MNI), and Bioamber Inc (NYSE:BIOA) to get a better sense of its popularity.
Follow Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)
Follow Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
Keeping this in mind, we’re going to take a peek at the recent action encompassing Dicerna Pharmaceuticals Inc (NASDAQ:DRNA).
How are hedge funds trading Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)?
Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 38% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards DRNA over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Peter Kolchinsky’s RA Capital Management has the biggest position in Dicerna Pharmaceuticals Inc (NASDAQ:DRNA), worth close to $14.3 million, corresponding to 1.5% of its total 13F portfolio. Sitting at the No. 2 spot is 683 Capital Partners, led by Ari Zweiman, holding a $2.1 million position; 0.2% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Renaissance Technologies, one of the largest hedge funds in the world, William Leland Edwards’ Palo Alto Investors and Nathan Fischel’s DAFNA Capital Management. We should note that 683 Capital Partners is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now, key hedge funds have jumped into Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) headfirst. 683 Capital Partners, led by Ari Zweiman, assembled the most valuable position in Dicerna Pharmaceuticals Inc (NASDAQ:DRNA). 683 Capital Partners had $2.1 million invested in the company at the end of the quarter. Hal Mintz’s Sabby Capital also made a $0.3 million investment in the stock during the quarter. The other funds with brand new DRNA positions are Behzad Aghazadeh’s venBio Select Advisor and Peter Muller’s PDT Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) but similarly valued. We will take a look at Assembly Biosciences Inc (NASDAQ:ASMB), The McClatchy Company (NYSE:MNI), Bioamber Inc (NYSE:BIOA), and CUI Global Inc (NASDAQ:CUI). This group of stocks’ market caps are similar to DRNA’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $22 million in DRNA’s case. Assembly Biosciences Inc (NASDAQ:ASMB) is the most popular stock in this table. On the other hand CUI Global Inc (NASDAQ:CUI) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Dicerna Pharmaceuticals Inc (NASDAQ:DRNA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.