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Alnylam Pharmaceuticals, Inc. (ALNY) Fell Out Of Favor With Hedge Funds?

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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 33 hedge funds' portfolios at the end of June. Our calculations also showed that ALNY isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Lyft, Inc. (NASDAQ:LYFT), Avangrid, Inc. (NYSE:AGR), and Wheaton Precious Metals Corp. (NYSE:WPM) to gather more data points.

Today there are numerous metrics stock market investors employ to size up their holdings. A duo of the less known metrics are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the best money managers can outperform their index-focused peers by a healthy margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, 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. Now we're going to view the latest hedge fund action regarding Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY).

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

At the end of the second quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. By comparison, 38 hedge funds held shares or bullish call options in ALNY a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Casdin Capital was the largest shareholder of Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), with a stake worth $169.5 million reported as of the end of June. Trailing Casdin Capital was Avoro Capital Advisors (venBio Select Advisor), which amassed a stake valued at $169.5 million. Farallon Capital, Alkeon Capital Management, and Holocene Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. 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, designating 2.95 percent of its 13F equity portfolio to ALNY.

Since Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) has witnessed bearish sentiment from the aggregate hedge fund industry, it's easy to see that there lies a certain "tier" of funds that decided to sell off their entire stakes last quarter. It's worth mentioning that John Overdeck and David Siegel's Two Sigma Advisors dropped the biggest investment of the "upper crust" of funds watched by Insider Monkey, worth about $4.5 million in stock, and Paul Tudor Jones's Tudor Investment Corp was right behind this move, as the fund dumped about $2.7 million worth. These moves are important to note, as aggregate 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 valuations are closest to ALNY's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LYFT,43,1385923,-17 AGR,12,46317,-3 WPM,26,471762,-2 DVN,50,1039305,-2 ALB,28,165344,-3 TW,15,164110,-11 XM,37,2430220,0 Average,30.1,814712,-5.4 [/table]

View table here if you experience formatting issues.

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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on ALNY as the stock returned 23% since the end of Q2 (through 10/15) 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.