In this article you are going to find out whether hedge funds think Biogen Inc. (NASDAQ:BIIB) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Biogen Inc. (NASDAQ:BIIB) investors should be aware of an increase in enthusiasm from smart money of late. Biogen Inc. (NASDAQ:BIIB) was in 67 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 81. Our calculations also showed that BIIB isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Alex Denner of Sarissa Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s check out the fresh hedge fund action regarding Biogen Inc. (NASDAQ:BIIB).
Do Hedge Funds Think BIIB Is A Good Stock To Buy Now?
At second quarter’s end, a total of 67 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BIIB over the last 24 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the number one position in Biogen Inc. (NASDAQ:BIIB), worth close to $460.5 million, amounting to 0.6% of its total 13F portfolio. On Renaissance Technologies’s heels is Citadel Investment Group, led by Ken Griffin, holding a $308 million call position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish encompass D. E. Shaw’s D E Shaw, Paul Marshall and Ian Wace’s Marshall Wace LLP and Alex Denner’s Sarissa Capital Management. In terms of the portfolio weights assigned to each position Sarissa Capital Management allocated the biggest weight to Biogen Inc. (NASDAQ:BIIB), around 17.7% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, earmarking 7.61 percent of its 13F equity portfolio to BIIB.
Now, some big names have jumped into Biogen Inc. (NASDAQ:BIIB) headfirst. Samlyn Capital, managed by Robert Pohly, created the most valuable position in Biogen Inc. (NASDAQ:BIIB). Samlyn Capital had $130.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $64.7 million position during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, Kamran Moghtaderi’s Eversept Partners, and Bill Miller’s Miller Value Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Biogen Inc. (NASDAQ:BIIB) but similarly valued. These stocks are Carvana Co. (NYSE:CVNA), ING Groep N.V. (NYSE:ING), UBS Group AG (NYSE:UBS), Relx PLC (NYSE:RELX), Roblox Corporation (NYSE:RBLX), Canadian Pacific Railway Limited (NYSE:CP), and Canadian Imperial Bank of Commerce (NYSE:CM). All of these stocks’ market caps are similar to BIIB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVNA | 63 | 8904829 | -1 |
| ING | 9 | 601603 | -1 |
| UBS | 15 | 176356 | -1 |
| RELX | 6 | 58838 | 2 |
| RBLX | 49 | 4914667 | 3 |
| CP | 25 | 6353608 | -8 |
| CM | 15 | 382874 | 1 |
| Average | 26 | 3056111 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $3056 million. That figure was $3117 million in BIIB’s case. Carvana Co. (NYSE:CVNA) is the most popular stock in this table. On the other hand Relx PLC (NYSE:RELX) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Biogen Inc. (NASDAQ:BIIB) is more popular among hedge funds. Our overall hedge fund sentiment score for BIIB is 83.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Unfortunately BIIB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BIIB were disappointed as the stock returned -17.2% since the end of the second quarter (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Biogen Inc. (NASDAQ:BIIB)
Follow Biogen Inc. (NASDAQ:BIIB)
Suggested Articles:
- 15 Biggest Software Companies In The World
- 10 Best Robinhood Stocks To Buy Right Now
- 10 Best REIT Stocks to Buy Right Now
Disclosure: None. This article was originally published at Insider Monkey.
