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The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Albireo Pharma, Inc. (NASDAQ:ALBO).
Is ALBO a good stock to buy now? The best stock pickers were becoming hopeful. The number of bullish hedge fund bets improved by 10 recently. Albireo Pharma, Inc. (NASDAQ:ALBO) was in 22 hedge funds' portfolios at the end of September. The all time high for this statistic is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ALBO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 66 percentage points since March 2017 (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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Felix Baker of Baker Bros.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind we're going to take a look at the latest hedge fund action regarding Albireo Pharma, Inc. (NASDAQ:ALBO).
Do Hedge Funds Think ALBO Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 83% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in ALBO a year ago. With hedge funds' capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Joseph Edelman's Perceptive Advisors has the number one position in Albireo Pharma, Inc. (NASDAQ:ALBO), worth close to $78.8 million, corresponding to 1.1% of its total 13F portfolio. On Perceptive Advisors's heels is Bihua Chen of Cormorant Asset Management, with a $23.4 million position; 0.9% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism comprise Paul Marshall and Ian Wace's Marshall Wace LLP, Julian Baker and Felix Baker's Baker Bros. Advisors and Michael Castor's Sio Capital. In terms of the portfolio weights assigned to each position Sio Capital allocated the biggest weight to Albireo Pharma, Inc. (NASDAQ:ALBO), around 3.16% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, earmarking 1.94 percent of its 13F equity portfolio to ALBO.
As industrywide interest jumped, specific money managers have been driving this bullishness. Cormorant Asset Management, managed by Bihua Chen, established the biggest position in Albireo Pharma, Inc. (NASDAQ:ALBO). Cormorant Asset Management had $23.4 million invested in the company at the end of the quarter. Michael Castor's Sio Capital also made a $16 million investment in the stock during the quarter. The other funds with brand new ALBO positions are OrbiMed Advisors, Israel Englander's Millennium Management, and Farallon Capital.
Let's now take a look at hedge fund activity in other stocks similar to Albireo Pharma, Inc. (NASDAQ:ALBO). We will take a look at Transportadora de Gas del Sur SA (NYSE:TGS), Wabash National Corporation (NYSE:WNC), The Andersons, Inc. (NASDAQ:ANDE), Colony Credit Real Estate, Inc. (NYSE:CLNC), Neenah Inc. (NYSE:NP), Clearwater Paper Corp (NYSE:CLW), and ImmunoGen, Inc. (NASDAQ:IMGN). This group of stocks' market caps match ALBO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TGS,6,9871,1 WNC,18,58904,3 ANDE,15,25045,4 CLNC,10,37346,4 NP,11,21432,-2 CLW,13,50476,-1 IMGN,18,129732,-2 Average,13,47544,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $220 million in ALBO's case. Wabash National Corporation (NYSE:WNC) is the most popular stock in this table. On the other hand Transportadora de Gas del Sur SA (NYSE:TGS) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Albireo Pharma, Inc. (NASDAQ:ALBO) is more popular among hedge funds. Our overall hedge fund sentiment score for ALBO is 90. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on ALBO as the stock returned 22.9% since the end of September (through 12/14) 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.