Were Hedge Funds Right About Alnylam Pharmaceuticals, Inc. (ALNY)?

In this article we will take a look at whether hedge funds think Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Hedge fund interest in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that ALNY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare ALNY to other stocks including Lyft, Inc. (NASDAQ:LYFT), Avangrid, Inc. (NYSE:AGR), and Wheaton Precious Metals Corp. (NYSE:WPM) to get a better sense of its popularity.

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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla 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. With all of this in mind let’s take a gander at the key hedge fund action encompassing Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).

Do Hedge Funds Think ALNY Is A Good Stock To Buy Now?

At the end of June, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 38 hedge funds with a bullish position in ALNY a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

The largest stake in Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) was held by Casdin Capital, which reported holding $169.5 million worth of stock at the end of June. It was followed by Avoro Capital Advisors (venBio Select Advisor) with a $169.5 million position. Other investors bullish on the company included Farallon Capital, Alkeon Capital Management, and Holocene Advisors. In terms of the portfolio weights assigned to each position Casdin Capital allocated the biggest weight to Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), around 4.3% of its 13F portfolio. Avoro Capital Advisors (venBio Select Advisor) is also relatively very bullish on the stock, setting aside 2.95 percent of its 13F equity portfolio to ALNY.

Seeing as Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has witnessed bearish sentiment from the smart money, logic holds that there is a sect of money managers that decided to sell off their full holdings by the end of the second quarter. Intriguingly, John Overdeck and David Siegel’s Two Sigma Advisors said goodbye to the largest investment of all the hedgies watched by Insider Monkey, totaling close to $4.5 million in stock, and Paul Tudor Jones’s Tudor Investment Corp was right behind this move, as the fund said goodbye to about $2.7 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

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. These stocks are Lyft, Inc. (NASDAQ:LYFT), Avangrid, Inc. (NYSE:AGR), Wheaton Precious Metals Corp. (NYSE:WPM), Devon Energy Corporation (NYSE:DVN), Albemarle Corporation (NYSE:ALB), Tradeweb Markets Inc. (NASDAQ:TW), and Qualtrics International Inc. (NASDAQ:XM). This group of stocks’ market values resemble ALNY’s market value.

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As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $815 million. That figure was $1023 million in ALNY’s case. Devon Energy Corporation (NYSE:DVN) is the most popular stock in this table. On the other hand Avangrid, Inc. (NYSE:AGR) is the least popular one with only 12 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 58. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 through November 5th and still beat the market by 3.1 percentage points. Hedge funds were also right about betting on ALNY as the stock returned 10.5% since the end of Q2 (through 11/5) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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