The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Akebia Therapeutics Inc (NASDAQ:AKBA) and determine whether the smart money was really smart about this stock.
Is Akebia Therapeutics Inc (NASDAQ:AKBA) ready to rally soon? Money managers were in a bullish mood. The number of bullish hedge fund positions rose by 7 recently. Akebia Therapeutics Inc (NASDAQ:AKBA) was in 25 hedge funds’ portfolios at the end of June. The all time high for this statistics is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AKBA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 18 hedge funds in our database with AKBA positions at the end of the first quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most stock holders, hedge funds are perceived as underperforming, old investment tools of the past. While there are greater than 8000 funds in operation at present, We hone in on the masters of this group, about 850 funds. It is estimated that this group of investors command bulk of all hedge funds’ total capital, and by observing their inimitable stock picks, Insider Monkey has figured out numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we’re going to review the key hedge fund action regarding Akebia Therapeutics Inc (NASDAQ:AKBA).
How are hedge funds trading Akebia Therapeutics Inc (NASDAQ:AKBA)?
At second quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 39% from the first quarter of 2020. By comparison, 14 hedge funds held shares or bullish call options in AKBA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Akebia Therapeutics Inc (NASDAQ:AKBA) was held by Baupost Group, which reported holding $203.7 million worth of stock at the end of September. It was followed by Consonance Capital Management with a $95.5 million position. Other investors bullish on the company included Nantahala Capital Management, Abrams Capital Management, and Great Point Partners. In terms of the portfolio weights assigned to each position Consonance Capital Management allocated the biggest weight to Akebia Therapeutics Inc (NASDAQ:AKBA), around 5.72% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, dishing out 3.81 percent of its 13F equity portfolio to AKBA.
As industrywide interest jumped, specific money managers were breaking ground themselves. Great Point Partners, managed by Jeffrey Jay and David Kroin, assembled the most outsized position in Akebia Therapeutics Inc (NASDAQ:AKBA). Great Point Partners had $47.7 million invested in the company at the end of the quarter. Arsani William’s Logos Capital also made a $16.3 million investment in the stock during the quarter. The other funds with brand new AKBA positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund, and Renaissance Technologies.
Let’s check out hedge fund activity in other stocks similar to Akebia Therapeutics Inc (NASDAQ:AKBA). These stocks are American National Group, Inc. (NASDAQ:ANAT), Wolverine World Wide, Inc. (NYSE:WWW), Embotelladora Andina S.A. (NYSE:AKO), Alector, Inc. (NASDAQ:ALEC), Corcept Therapeutics Incorporated (NASDAQ:CORT), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), and LexinFintech Holdings Ltd. (NASDAQ:LX). This group of stocks’ market valuations are similar to AKBA’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $618 million in AKBA’s case. Alector, Inc. (NASDAQ:ALEC) is the most popular stock in this table. On the other hand Embotelladora Andina S.A. (NYSE:AKO) is the least popular one with only 2 bullish hedge fund positions. Akebia Therapeutics Inc (NASDAQ:AKBA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AKBA is 82.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately AKBA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on AKBA were disappointed as the stock returned -81.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.