Is Array Biopharma Inc (ARRY) a Good Stock To Buy?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Array Biopharma Inc (NASDAQ:ARRY) in this article.

Array Biopharma Inc (NASDAQ:ARRY) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. ARRY was in 22 hedge funds’ portfolios at the end of the third quarter of 2015. There were 21 hedge funds in our database with ARRY holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as William Lyon Homes (NYSE:WLH), Washington Trust Bancorp (NASDAQ:WASH), and Mercer International Inc. (NASDAQ:MERC) to gather more data points.

Now, let’s take a peek at the new action surrounding Array Biopharma Inc (NASDAQ:ARRY).

What have hedge funds been doing with Array Biopharma Inc (NASDAQ:ARRY)?

Heading into Q4, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Redmile Group, managed by Jeremy Green, holds the most valuable position in Array Biopharma Inc (NASDAQ:ARRY). Redmile Group has a $80.9 million position in the stock, comprising 1.9% of its 13F portfolio. The second largest stake is held by Samuel Isaly of OrbiMed Advisors, with a $45.9 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions comprise James E. Flynn’s Deerfield Management, Mark Lampert’s Biotechnology Value Fund / BVF Inc and Julian Baker and Felix Baker’s Baker Bros. Advisors.

As aggregate interest increased, key money managers have been driving this bullishness. Fisher Asset Management, managed by Ken Fisher, assembled the most outsized position in Array Biopharma Inc (NASDAQ:ARRY). Fisher Asset Management had $0.6 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also made a $0.5 million investment in the stock during the quarter. The other funds with brand new ARRY positions are D. E. Shaw’s D E Shaw, Adam Usdan’s Trellus Management Company, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now review hedge fund activity in other stocks similar to Array Biopharma Inc (NASDAQ:ARRY). These stocks are William Lyon Homes (NYSE:WLH), Washington Trust Bancorp (NASDAQ:WASH), Mercer International Inc. (NASDAQ:MERC), and First Potomac Realty Trust (NYSE:FPO). This group of stocks’ market values are similar to ARRY’s market value.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $144 million. That figure was $266 million in ARRY’s case. William Lyon Homes (NYSE:WLH) is the most popular stock in this table. On the other hand Washington Trust Bancorp (NASDAQ:WASH) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Array Biopharma Inc (NASDAQ:ARRY) 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.