The Insider Monkey team has completed processing the quarterly 13F filings for the June 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 Akcea Therapeutics, Inc. (NASDAQ:AKCA).
Akcea Therapeutics, Inc. (NASDAQ:AKCA) shareholders have witnessed an increase in hedge fund sentiment in recent months. Our calculations also showed that AKCA isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? 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 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a peek at the recent hedge fund action regarding Akcea Therapeutics, Inc. (NASDAQ:AKCA).
How are hedge funds trading Akcea Therapeutics, Inc. (NASDAQ:AKCA)?
At the end of the second quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in AKCA a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Akcea Therapeutics, Inc. (NASDAQ:AKCA), which was worth $14.7 million at the end of the second quarter. On the second spot was OZ Management which amassed $4.7 million worth of shares. Moreover, Hudson Bay Capital Management, Citadel Investment Group, and Tudor Investment Corp were also bullish on Akcea Therapeutics, Inc. (NASDAQ:AKCA), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, specific money managers were breaking ground themselves. Tudor Investment Corp, managed by Paul Tudor Jones, established the most outsized position in Akcea Therapeutics, Inc. (NASDAQ:AKCA). Tudor Investment Corp had $0.7 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $0.5 million position during the quarter. The following funds were also among the new AKCA investors: Israel Englander's Millennium Management and Joel Greenblatt's Gotham Asset Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Akcea Therapeutics, Inc. (NASDAQ:AKCA) but similarly valued. These stocks are Urban Edge Properties (NYSE:UE), National Beverage Corp. (NASDAQ:FIZZ), Renasant Corporation (NASDAQ:RNST), and DiamondRock Hospitality Company (NYSE:DRH). This group of stocks' market caps match AKCA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UE,12,121836,-2 FIZZ,22,261569,1 RNST,11,30890,-5 DRH,17,177431,4 Average,15.5,147932,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $148 million. That figure was $24 million in AKCA's case. National Beverage Corp. (NASDAQ:FIZZ) is the most popular stock in this table. On the other hand Renasant Corporation (NASDAQ:RNST) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Akcea Therapeutics, Inc. (NASDAQ:AKCA) is even less popular than RNST. Hedge funds dodged a bullet by taking a bearish stance towards AKCA. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately AKCA wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); AKCA investors were disappointed as the stock returned -34.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.