Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Agios Pharmaceuticals Inc (NASDAQ:AGIO).
Agios Pharmaceuticals Inc (NASDAQ:AGIO) has experienced a decrease in enthusiasm from smart money lately. Agios Pharmaceuticals Inc (NASDAQ:AGIO) was in 22 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 31. There were 26 hedge funds in our database with AGIO holdings at the end of December. Our calculations also showed that AGIO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Do Hedge Funds Think AGIO Is A Good Stock To Buy Now?
At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from the fourth quarter of 2020. By comparison, 23 hedge funds held shares or bullish call options in AGIO a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management has the number one position in Agios Pharmaceuticals Inc (NASDAQ:AGIO), worth close to $131.4 million, comprising 2.9% of its total 13F portfolio. On Rock Springs Capital Management’s heels is Casdin Capital, managed by Eli Casdin, which holds a $111.8 million position; 3.3% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism include Arthur B Cohen and Joseph Healey’s Healthcor Management LP, Farallon Capital and Aaron Cowen’s Suvretta Capital Management. In terms of the portfolio weights assigned to each position Casdin Capital allocated the biggest weight to Agios Pharmaceuticals Inc (NASDAQ:AGIO), around 3.33% of its 13F portfolio. Rock Springs Capital Management is also relatively very bullish on the stock, designating 2.87 percent of its 13F equity portfolio to AGIO.
Judging by the fact that Agios Pharmaceuticals Inc (NASDAQ:AGIO) has faced bearish sentiment from the smart money, it’s safe to say that there was a specific group of money managers that elected to cut their full holdings last quarter. It’s worth mentioning that OrbiMed Advisors said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth close to $95.6 million in stock, and Mitchell Blutt’s Consonance Capital Management was right behind this move, as the fund dropped about $27.4 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 4 funds last quarter.
Let’s also examine hedge fund activity in other stocks similar to Agios Pharmaceuticals Inc (NASDAQ:AGIO). We will take a look at Viavi Solutions Inc (NASDAQ:VIAV), LivaNova PLC (NASDAQ:LIVN), Texas Capital Bancshares Inc (NASDAQ:TCBI), Altra Industrial Motion Corp. (NASDAQ:AIMC), First Hawaiian, Inc. (NASDAQ:FHB), Hillenbrand, Inc. (NYSE:HI), and LivePerson, Inc. (NASDAQ:LPSN). This group of stocks’ market valuations are closest to AGIO’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $242 million. That figure was $547 million in AGIO’s case. LivePerson, Inc. (NASDAQ:LPSN) is the most popular stock in this table. On the other hand Hillenbrand, Inc. (NYSE:HI) is the least popular one with only 15 bullish hedge fund positions. Agios Pharmaceuticals Inc (NASDAQ:AGIO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AGIO is 44.2. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately AGIO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AGIO investors were disappointed as the stock returned 8.5% since the end of March (through 7/16) 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 in 2021.
Follow Agios Pharmaceuticals Inc. (NASDAQ:AGIO)
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Disclosure: None. This article was originally published at Insider Monkey.