Is Acceleron Pharma Inc (NASDAQ:XLRN) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Acceleron Pharma Inc (NASDAQ:XLRN) a buy, sell, or hold? The smart money is taking an optimistic view. The number of bullish hedge fund bets increased by 3 in recent months. Our calculations also showed that xlrn isn't among the 30 most popular stocks among hedge funds. XLRN was in 27 hedge funds' portfolios at the end of September. There were 24 hedge funds in our database with XLRN holdings at the end of the previous quarter.
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 has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to review the latest hedge fund action surrounding Acceleron Pharma Inc (NASDAQ:XLRN).
What have hedge funds been doing with Acceleron Pharma Inc (NASDAQ:XLRN)?
At Q3's end, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards XLRN over the last 13 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Acceleron Pharma Inc (NASDAQ:XLRN) was held by Farallon Capital, which reported holding $105.3 million worth of stock at the end of September. It was followed by Perceptive Advisors with a $87.5 million position. Other investors bullish on the company included Deerfield Management, Great Point Partners, and Hillhouse Capital Management.
As aggregate interest increased, key hedge funds have jumped into Acceleron Pharma Inc (NASDAQ:XLRN) headfirst. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, established the most valuable position in Acceleron Pharma Inc (NASDAQ:XLRN). Alkeon Capital Management had $15.6 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also made a $0.7 million investment in the stock during the quarter. The other funds with brand new XLRN positions are Nick Thakore's Diametric Capital, Michael Platt and William Reeves's BlueCrest Capital Mgmt., and Israel Englander's Millennium Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Acceleron Pharma Inc (NASDAQ:XLRN) but similarly valued. These stocks are Nextera Energy Partners LP (NYSE:NEP), Supernus Pharmaceuticals Inc (NASDAQ:SUPN), AMC Entertainment Holdings Inc (NYSE:AMC), and Crestwood Equity Partners LP (NYSE:CEQP). This group of stocks' market caps are similar to XLRN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NEP,12,56818,5 SUPN,14,59831,-3 AMC,21,159127,7 CEQP,4,35008,-2 Average,12.75,77696,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $441 million in XLRN's case. AMC Entertainment Holdings Inc (NYSE:AMC) is the most popular stock in this table. On the other hand Crestwood Equity Partners LP (NYSE:CEQP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Acceleron Pharma Inc (NASDAQ:XLRN) 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.
Disclosure: None. This article was originally published at Insider Monkey.