Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Here’s What Hedge Funds Think About Alnylam Pharmaceuticals, Inc. (ALNY)

Hedge fund managers like David Einhorn, Bill Ackman, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).

Is Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) the right investment to pursue these days? The smart money is getting less optimistic. The number of bullish hedge fund bets shrunk by 2 recently. Our calculations also showed that ALNY isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

BRIDGER MANAGEMENT

Let’s take a look at the fresh hedge fund action regarding Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).

Hedge fund activity in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)

Heading into the second quarter of 2019, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ALNY over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

ALNY_june2019

More specifically, Maverick Capital was the largest shareholder of Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), with a stake worth $300 million reported as of the end of March. Trailing Maverick Capital was 12 West Capital Management, which amassed a stake valued at $68.7 million. Bridger Management, Farallon Capital, and Slate Path Capital were also very fond of the stock, giving the stock large weights in their portfolios.

Seeing as Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has faced falling interest from hedge fund managers, logic holds that there were a few hedgies who were dropping their full holdings heading into Q3. Interestingly, Stephen DuBois’s Camber Capital Management sold off the biggest investment of the “upper crust” of funds watched by Insider Monkey, comprising an estimated $43.7 million in stock. Joseph Edelman’s fund, Perceptive Advisors, also sold off its stock, about $18.5 million worth. These moves are interesting, as aggregate hedge fund interest fell by 2 funds heading into Q3.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) but similarly valued. We will take a look at Viacom, Inc. (NASDAQ:VIAB), The Gap Inc. (NYSE:GPS), AXA Equitable Holdings, Inc. (NYSE:EQH), and Vedanta Ltd (NYSE:VEDL). This group of stocks’ market valuations resemble ALNY’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VIAB 38 936205 1
GPS 27 317539 7
EQH 35 1030862 9
VEDL 6 50111 -1
Average 26.5 583679 4

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $584 million. That figure was $754 million in ALNY’s case. Viacom, Inc. (NASDAQ:VIAB) is the most popular stock in this table. On the other hand Vedanta Ltd (NYSE:VEDL) is the least popular one with only 6 bullish hedge fund positions. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately ALNY wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ALNY investors were disappointed as the stock returned -26.5% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...