Is ISIS Pharmaceuticals, Inc. (SIS) Going to Burn These Hedge Funds?

Since ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) has faced declining sentiment from the smart money, we can see that there were a few hedgies that slashed their entire stakes in the third quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest position of all the hedgies followed by Insider Monkey, totaling close to $22.3 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its entire holding, about $18 million worth of ISIS shares. These moves are important to note, as aggregate hedge fund interest was cut by 5 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 ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) but similarly valued. We will take a look at StanCorp Financial Group, Inc. (NYSE:SFG), Seattle Genetics, Inc. (NASDAQ:SGEN), Cameco Corporation (USA) (NYSE:CCJ), and Michaels Companies Inc (NASDAQ:MIK). This group of stocks’ market valuations resemble ISIS’s market valuation.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $777 million. That figure was a meager $94 million in ISIS’s case, a negative signal. StanCorp Financial Group, Inc. (NYSE:SFG) is the most popular stock in this table, while the four stocks, including ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) sit at the bottom with only 21 bullish hedge fund positions. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.