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At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Alpine Immune Sciences, Inc. (NASDAQ:ALPN).
Alpine Immune Sciences, Inc. (NASDAQ:ALPN) investors should be aware of a decrease in hedge fund sentiment of late. ALPN was in 5 hedge funds' portfolios at the end of the first quarter of 2020. There were 7 hedge funds in our database with ALPN positions at the end of the previous quarter. Our calculations also showed that ALPN 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are dozens of signals stock traders employ to value their holdings. Some of the most under-the-radar signals are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the elite investment managers can beat the market by a superb amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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. With all of this in mind we're going to analyze the latest hedge fund action encompassing Alpine Immune Sciences, Inc. (NASDAQ:ALPN).
What have hedge funds been doing with Alpine Immune Sciences, Inc. (NASDAQ:ALPN)?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the fourth quarter of 2019. On the other hand, there were a total of 6 hedge funds with a bullish position in ALPN a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Samuel Isaly's OrbiMed Advisors has the number one position in Alpine Immune Sciences, Inc. (NASDAQ:ALPN), worth close to $10.6 million, accounting for 0.2% of its total 13F portfolio. On OrbiMed Advisors's heels is Frazier Healthcare Partners, managed by Alan Frazier, which holds a $7.4 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Mark Lampert's Biotechnology Value Fund / BVF Inc, Julian Robertson's Tiger Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Frazier Healthcare Partners allocated the biggest weight to Alpine Immune Sciences, Inc. (NASDAQ:ALPN), around 0.84% of its 13F portfolio. Biotechnology Value Fund / BVF Inc is also relatively very bullish on the stock, dishing out 0.31 percent of its 13F equity portfolio to ALPN.
Since Alpine Immune Sciences, Inc. (NASDAQ:ALPN) has experienced bearish sentiment from the smart money, we can see that there exists a select few money managers that elected to cut their full holdings heading into Q4. At the top of the heap, James E. Flynn's Deerfield Management dumped the biggest position of all the hedgies followed by Insider Monkey, comprising close to $1 million in stock, and Neil Shahrestani's Ikarian Capital was right behind this move, as the fund dropped about $0 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Alpine Immune Sciences, Inc. (NASDAQ:ALPN) but similarly valued. We will take a look at Aridis Pharmaceuticals Inc. (NASDAQ:ARDS), IMPAC Mortgage Holdings, Inc (NYSE:IMH), IF Bancorp Inc (NASDAQ:IROQ), and Oncolytics Biotech, Inc. (NASDAQ:ONCY). All of these stocks' market caps are closest to ALPN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARDS,1,60,0 IMH,4,416,0 IROQ,1,1879,0 ONCY,2,266,1 Average,2,655,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $22 million in ALPN's case. IMPAC Mortgage Holdings, Inc (NYSE:IMH) is the most popular stock in this table. On the other hand Aridis Pharmaceuticals Inc. (NASDAQ:ARDS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Alpine Immune Sciences, Inc. (NASDAQ:ALPN) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on ALPN as the stock returned 28.5% so far in Q2 (through the end of May) 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.
Disclosure: None. This article was originally published at Insider Monkey.