Here is What Hedge Funds Think About Agios Pharmaceuticals Inc (AGIO)

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).

According to most stock holders, hedge funds are seen as underperforming, old financial vehicles of the past. While there are over 8000 funds with their doors open today, Our experts hone in on the top tier of this group, approximately 850 funds. Most estimates calculate that this group of people manage most of all hedge funds’ total capital, and by observing their inimitable picks, Insider Monkey has brought to light numerous investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Aaron Cowen Suvretta Capital

Aaron Cowen of Suvretta Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. Keeping this in mind let’s take a peek at the latest hedge fund action regarding Agios Pharmaceuticals Inc (NASDAQ:AGIO).

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
VIAV 28 281525 1
LIVN 28 694228 -2
TCBI 29 300284 19
AIMC 18 34178 3
FHB 19 174114 5
HI 15 17557 2
LPSN 31 193585 -4
Average 24 242210 3.4

View table here if you experience formatting issues.

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)

Suggested Articles:

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