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Hedge Funds Are Buying Acceleron Pharma Inc (XLRN)

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Acceleron Pharma Inc (NASDAQ:XLRN) investors should pay attention to an increase in support from the world’s most elite money managers recently. XLRN was in 22 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with XLRN holdings at the end of the previous quarter. At the end of this article we will also compare XLRN to other stocks including The Buckle, Inc. (NYSE:BKE), Endurance International Group Hldgs Inc (NASDAQ:EIGI), and Globalstar, Inc. (PINK:GSAT) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.



Keeping this in mind, we’re going to go over the recent action surrounding Acceleron Pharma Inc (NASDAQ:XLRN).

What have hedge funds been doing with Acceleron Pharma Inc (NASDAQ:XLRN)?

Heading into the fourth quarter of 2016, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, up 5% from the second quarter of 2016. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).


When looking at the institutional investors followed by Insider Monkey, Benjamin A. Smith’s Laurion Capital Management has the most valuable position in Acceleron Pharma Inc (NASDAQ:XLRN), worth close to $25 million, accounting for 0.2% of its total 13F portfolio. On Laurion Capital Management’s heels is QVT Financial, managed by Daniel Gold, which holds a $23 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass Joseph Edelman’s Perceptive Advisors, Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management and Peter Kolchinsky’s RA Capital Management.

As one would reasonably expect, key money managers have jumped into Acceleron Pharma Inc (NASDAQ:XLRN) headfirst. Benjamin A. Smith’s Laurion Capital Management assembled the most outsized position in Acceleron Pharma Inc (NASDAQ:XLRN), followed by Peter Kolchinsky’s RA Capital Management, which initiated a $11.5 million position during the quarter. The following funds were also among the new XLRN investors: Lei Zhang’s Hillhouse Capital Management, Jim Simons’s Renaissance Technologies, and Cliff Asness’s AQR Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Acceleron Pharma Inc (NASDAQ:XLRN) but similarly valued. These stocks are The Buckle, Inc. (NYSE:BKE), Endurance International Group Hldgs Inc (NASDAQ:EIGI), Globalstar, Inc. (PINK:GSAT), and Methode Electronics Inc. (NYSE:MEI). This group of stocks’ market caps resemble XLRN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BKE 15 114776 3
EIGI 7 66146 1
GSAT 18 106574 -2
MEI 15 118796 -1

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $158 million in XLRN’s case. Globalstar, Inc. (PINK:GSAT) is the most popular stock in this table. On the other hand Endurance International Group Hldgs Inc (NASDAQ:EIGI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Acceleron Pharma Inc (NASDAQ:XLRN) 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.

Disclosure: none.

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