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Is Albireo Pharma, Inc. (ALBO) A Good Stock To Buy?

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Albireo Pharma, Inc. (NASDAQ:ALBO).

Albireo Pharma, Inc. (NASDAQ:ALBO) has experienced an increase in hedge fund interest of late. Our calculations also showed that ALBO isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

We’re going to take a look at the latest hedge fund action surrounding Albireo Pharma, Inc. (NASDAQ:ALBO).

What have hedge funds been doing with Albireo Pharma, Inc. (NASDAQ:ALBO)?

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in ALBO at the beginning of this year. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

ALBO_dec2018

The largest stake in Albireo Pharma, Inc. (NASDAQ:ALBO) was held by Perceptive Advisors, which reported holding $56.2 million worth of stock at the end of September. It was followed by Baker Bros. Advisors with a $8.2 million position. Other investors bullish on the company included Biotechnology Value Fund / BVF Inc, Sectoral Asset Management, and Prosight Capital.

As one would reasonably expect, key money managers have been driving this bullishness. Prosight Capital, managed by Lawrence Hawkins, created the biggest position in Albireo Pharma, Inc. (NASDAQ:ALBO). Prosight Capital had $5.4 million invested in the company at the end of the quarter.

Let’s also examine hedge fund activity in other stocks similar to Albireo Pharma, Inc. (NASDAQ:ALBO). We will take a look at Fly Leasing Ltd (NYSE:FLY), Park Electrochemical Corp. (NYSE:PKE), BlackRock California Municipal Income Trust (NYSE:BFZ), and Heritage Insurance Holdings Inc (NYSE:HRTG). This group of stocks’ market caps resemble ALBO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FLY 8 29699 0
PKE 10 83570 -2
BFZ 1 647 -1
HRTG 8 38129 0
Average 6.75 38011 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $38 million. That figure was $93 million in ALBO’s case. Park Electrochemical Corp. (NYSE:PKE) is the most popular stock in this table. On the other hand BlackRock California Municipal Income Trust (NYSE:BFZ) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Albireo Pharma, Inc. (NASDAQ:ALBO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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

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