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Hedge Funds Nibbling On Allena Pharmaceuticals, Inc. (ALNA)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Allena Pharmaceuticals, Inc. (NASDAQ:ALNA) based on those filings.

Is Allena Pharmaceuticals, Inc. (NASDAQ:ALNA) a healthy stock for your portfolio? Prominent investors are becoming more confident. The number of long hedge fund bets inched up by 2 lately. Our calculations also showed that ALNA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). ALNA was in 7 hedge funds’ portfolios at the end of the first quarter of 2020. There were 5 hedge funds in our database with ALNA holdings at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

At the moment there are dozens of formulas stock market investors can use to appraise publicly traded companies. Two of the most underrated formulas are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the elite investment managers can outpace the S&P 500 by a superb margin (see the details here).

Millennium Management, Catapult Capital Management

Israel Englander of Millennium Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s view the key hedge fund action encompassing Allena Pharmaceuticals, Inc. (NASDAQ:ALNA).

How are hedge funds trading Allena Pharmaceuticals, Inc. (NASDAQ:ALNA)?

Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from the fourth quarter of 2019. By comparison, 5 hedge funds held shares or bullish call options in ALNA a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is ALNA A Good Stock To Buy?

Among these funds, Frazier Healthcare Partners held the most valuable stake in Allena Pharmaceuticals, Inc. (NASDAQ:ALNA), which was worth $3.2 million at the end of the third quarter. On the second spot was Sphera Global Healthcare Fund which amassed $0.6 million worth of shares. Renaissance Technologies, Millennium Management, and Partner Fund Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Frazier Healthcare Partners allocated the biggest weight to Allena Pharmaceuticals, Inc. (NASDAQ:ALNA), around 0.36% of its 13F portfolio. Sphera Global Healthcare Fund is also relatively very bullish on the stock, dishing out 0.08 percent of its 13F equity portfolio to ALNA.

As aggregate interest increased, some big names were breaking ground themselves. Sphera Global Healthcare Fund, managed by Doron Breen and Mori Arkin, initiated the largest position in Allena Pharmaceuticals, Inc. (NASDAQ:ALNA). Sphera Global Healthcare Fund had $0.6 million invested in the company at the end of the quarter. Christopher James’s Partner Fund Management also initiated a $0.3 million position during the quarter.

Let’s now review hedge fund activity in other stocks similar to Allena Pharmaceuticals, Inc. (NASDAQ:ALNA). These stocks are Broadwind Energy Inc. (NASDAQ:BWEN), Gridsum Holding Inc. (NASDAQ:GSUM), Tecogen Inc. (NASDAQ:TGEN), and Superior Energy Services, Inc. (NYSE:SPN). This group of stocks’ market valuations match ALNA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BWEN 3 1292 0
GSUM 5 4309 0
TGEN 1 43 0
SPN 8 5891 -2
Average 4.25 2884 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $5 million in ALNA’s case. Superior Energy Services, Inc. (NYSE:SPN) is the most popular stock in this table. On the other hand Tecogen Inc. (NASDAQ:TGEN) is the least popular one with only 1 bullish hedge fund positions. Allena Pharmaceuticals, Inc. (NASDAQ:ALNA) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on ALNA as the stock returned 104.6% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.