The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Biogen Inc. (NASDAQ:BIIB) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is BIIB stock a buy or sell? Biogen Inc. (NASDAQ:BIIB) investors should pay attention to an increase in enthusiasm from smart money of late. Biogen Inc. (NASDAQ:BIIB) was in 63 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 81. There were 59 hedge funds in our database with BIIB holdings at the end of September. Our calculations also showed that BIIB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). With all of this in mind we’re going to view the new hedge fund action encompassing Biogen Inc. (NASDAQ:BIIB).
Do Hedge Funds Think BIIB Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 63 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 61 hedge funds with a bullish position in BIIB a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies has the biggest position in Biogen Inc. (NASDAQ:BIIB), worth close to $743.8 million, accounting for 0.8% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, led by Cliff Asness, holding a $245.5 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other peers that are bullish comprise D. E. Shaw’s D E Shaw, Warren Buffett’s Berkshire Hathaway and Alex Denner’s Sarissa Capital Management. In terms of the portfolio weights assigned to each position Sarissa Capital Management allocated the biggest weight to Biogen Inc. (NASDAQ:BIIB), around 16.07% of its 13F portfolio. Sabby Capital is also relatively very bullish on the stock, dishing out 5.49 percent of its 13F equity portfolio to BIIB.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Deerfield Management, managed by James E. Flynn, initiated the largest position in Biogen Inc. (NASDAQ:BIIB). Deerfield Management had $109.7 million invested in the company at the end of the quarter. Palo Alto Investors also made a $57.4 million investment in the stock during the quarter. The other funds with brand new BIIB positions are Stephen DuBois’s Camber Capital Management, Brian Ashford-Russell and Tim Woolley’s Polar Capital, and Farallon Capital.
Let’s now review hedge fund activity in other stocks similar to Biogen Inc. (NASDAQ:BIIB). We will take a look at The Trade Desk, Inc. (NASDAQ:TTD), The Bank of New York Mellon Corporation (NYSE:BK), Microchip Technology Incorporated (NASDAQ:MCHP), Cintas Corporation (NASDAQ:CTAS), Chewy, Inc. (NYSE:CHWY), MSCI Inc (NYSE:MSCI), and Brown-Forman Corporation (NYSE:BF). This group of stocks’ market valuations match BIIB’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 38.7 hedge funds with bullish positions and the average amount invested in these stocks was $1554 million. That figure was $2753 million in BIIB’s case. The Bank of New York Mellon Corporation (NYSE:BK) is the most popular stock in this table. On the other hand Brown-Forman Corporation (NYSE:BF) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Biogen Inc. (NASDAQ:BIIB) is more popular among hedge funds. Our overall hedge fund sentiment score for BIIB is 82.3. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on BIIB as the stock returned 9.1% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.