At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) makes for a good investment right now.
Is ALNY a good stock to buy now? Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) investors should be aware of a decrease in hedge fund sentiment recently. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) was in 35 hedge funds’ portfolios at the end of September. The all time high for this statistic is 38. Our calculations also showed that ALNY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are perceived as slow, old financial vehicles of the past. While there are greater than 8000 funds with their doors open today, We choose to focus on the elite of this club, approximately 850 funds. These hedge fund managers direct bulk of the smart money’s total capital, and by keeping track of their highest performing equity investments, Insider Monkey has brought to light many investment strategies that have historically outperformed the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now we’re going to take a peek at the latest hedge fund action surrounding Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).
Do Hedge Funds Think ALNY Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ALNY over the last 21 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Among these funds, Farallon Capital held the most valuable stake in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), which was worth $174.7 million at the end of the third quarter. On the second spot was Maverick Capital which amassed $140.9 million worth of shares. 12 West Capital Management, Casdin Capital, and Alkeon Capital 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 12 West Capital Management allocated the biggest weight to Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), around 5.21% of its 13F portfolio. Bridger Management is also relatively very bullish on the stock, dishing out 4.18 percent of its 13F equity portfolio to ALNY.
Due to the fact that Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has experienced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few funds who sold off their full holdings in the third quarter. At the top of the heap, Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the largest investment of the “upper crust” of funds watched by Insider Monkey, totaling about $8.6 million in stock. Jerome Pfund and Michael Sjostrom’s fund, Sectoral Asset Management, also said goodbye to its stock, about $2.6 million worth. These moves are important to note, as total hedge fund interest fell by 3 funds in the third quarter.
Let’s now take a look at 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 Check Point Software Technologies Ltd. (NASDAQ:CHKP), NatWest Group plc (NYSE:NWG), Grifols SA (NASDAQ:GRFS), ZoomInfo Technologies Inc. (NASDAQ:ZI), Domino’s Pizza, Inc. (NYSE:DPZ), Tractor Supply Company (NASDAQ:TSCO), and Fox Corporation (NASDAQ:FOXA). All of these stocks’ market caps resemble ALNY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $866 million. That figure was $903 million in ALNY’s case. Tractor Supply Company (NASDAQ:TSCO) is the most popular stock in this table. On the other hand NatWest Group plc (NYSE:NWG) is the least popular one with only 2 bullish hedge fund positions. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ALNY is 65.5. 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 positive signal but 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and beat the market again by 16.4 percentage points. Unfortunately ALNY wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ALNY were disappointed as the stock returned -2.2% since the end of September (through 12/18) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.