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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th. In this article we look at what those investors think of Ionis Pharmaceuticals, Inc. (NASDAQ:IONS).
Is Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) ready to rally soon? Money managers were in an optimistic mood. The number of bullish hedge fund positions moved up by 1 recently. Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) was in 24 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that IONS isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 23 hedge funds in our database with IONS holdings at the end of March.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Dmitry Balyasny of Balyasny Asset Management
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. With all of this in mind let's take a glance at the fresh hedge fund action regarding Ionis Pharmaceuticals, Inc. (NASDAQ:IONS).
Do Hedge Funds Think IONS Is A Good Stock To Buy Now?
At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in IONS over the last 24 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, ARK Investment Management was the largest shareholder of Ionis Pharmaceuticals, Inc. (NASDAQ:IONS), with a stake worth $355.3 million reported as of the end of June. Trailing ARK Investment Management was Camber Capital Management, which amassed a stake valued at $79.8 million. Point72 Asset Management, Woodline Partners, and Millennium Management 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 Camber Capital Management allocated the biggest weight to Ionis Pharmaceuticals, Inc. (NASDAQ:IONS), around 2.69% of its 13F portfolio. Eversept Partners is also relatively very bullish on the stock, setting aside 1.38 percent of its 13F equity portfolio to IONS.
As aggregate interest increased, specific money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, assembled the most valuable position in Ionis Pharmaceuticals, Inc. (NASDAQ:IONS). Point72 Asset Management had $39 million invested in the company at the end of the quarter. Kamran Moghtaderi's Eversept Partners also made a $17.6 million investment in the stock during the quarter. The other funds with brand new IONS positions are Dmitry Balyasny's Balyasny Asset Management, Dmitry Balyasny's Balyasny Asset Management, and Doron Breen and Mori Arkin's Sphera Global Healthcare Fund.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) but similarly valued. We will take a look at MGM Growth Properties LLC (NYSE:MGP), eXp World Holdings, Inc. (NASDAQ:EXPI), Owl Rock Capital Corporation (NYSE:ORCC), Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC), Houlihan Lokey Inc (NYSE:HLI), TIM S.A. (NYSE:TIMB), and Graphic Packaging Holding Company (NYSE:GPK). This group of stocks' market values are similar to IONS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MGP,29,505366,-5 EXPI,18,104389,3 ORCC,15,298081,-5 PAC,7,92661,2 HLI,18,192379,2 TIMB,11,82831,-1 GPK,27,534219,6 Average,17.9,258561,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.9 hedge funds with bullish positions and the average amount invested in these stocks was $259 million. That figure was $710 million in IONS's case. MGM Growth Properties LLC (NYSE:MGP) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC) is the least popular one with only 7 bullish hedge fund positions. Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IONS is 70.4. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately IONS wasn't nearly as popular as these 5 stocks and hedge funds that were betting on IONS were disappointed as the stock returned -23.7% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.