Hedge Funds Aren’t Crazy About Ionis Pharmaceuticals, Inc. (IONS) Anymore
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) based on those filings.
Is Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) a sound investment now? The best stock pickers are in a bearish mood. The number of long hedge fund positions decreased by 5 in recent months. Our calculations also showed that IONS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). IONS was in 22 hedge funds' portfolios at the end of March. There were 27 hedge funds in our database with IONS positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are plenty of indicators shareholders employ to assess their stock investments. Two of the most underrated indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best money managers can trounce the broader indices by a significant amount (see the details here).
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Oleg Nodelman of EcoR1 Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a glance at the recent hedge fund action regarding Ionis Pharmaceuticals, Inc. (NASDAQ:IONS).
What does smart money think about Ionis Pharmaceuticals, Inc. (NASDAQ:IONS)?
At Q1's end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IONS over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) was held by Biotechnology Value Fund / BVF Inc, which reported holding $91.9 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $82.2 million position. Other investors bullish on the company included Renaissance Technologies, Two Sigma Advisors, and EcoR1 Capital. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Ionis Pharmaceuticals, Inc. (NASDAQ:IONS), around 8.57% of its 13F portfolio. L2 Asset Management is also relatively very bullish on the stock, earmarking 1.92 percent of its 13F equity portfolio to IONS.
Judging by the fact that Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of funds that slashed their full holdings heading into Q4. It's worth mentioning that Samuel Isaly's OrbiMed Advisors cut the biggest investment of all the hedgies tracked by Insider Monkey, worth about $6.5 million in stock, and Highbridge Capital Management was right behind this move, as the fund dumped about $5.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 5 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) but similarly valued. These stocks are Guardant Health, Inc. (NASDAQ:GH), Guidewire Software Inc (NYSE:GWRE), ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), and Perrigo Company plc (NYSE:PRGO). All of these stocks' market caps are similar to IONS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GH,27,549369,-2 GWRE,34,756960,2 ACAD,28,2404189,-6 PRGO,28,463596,1 Average,29.25,1043529,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $1044 million. That figure was $342 million in IONS's case. Guidewire Software Inc (NYSE:GWRE) is the most popular stock in this table. On the other hand Guardant Health, Inc. (NASDAQ:GH) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) is even less popular than GH. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on IONS, though not to the same extent, as the stock returned 23.9% during the second quarter (through June 10th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
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