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Were Hedge Funds Right About Alpine Immune Sciences, Inc. (ALPN)?

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In this article we are going to use hedge fund sentiment as a tool and determine whether Alpine Immune Sciences, Inc. (NASDAQ:ALPN) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is Alpine Immune Sciences, Inc. (NASDAQ:ALPN) an attractive investment now? Prominent investors were getting less optimistic. The number of bullish hedge fund positions decreased by 1 recently. Alpine Immune Sciences, Inc. (NASDAQ:ALPN) was in 16 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 17. Our calculations also showed that ALPN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

To most traders, hedge funds are viewed as worthless, outdated investment tools of years past. While there are over 8000 funds in operation at present, Our researchers look at the masters of this club, around 850 funds. Most estimates calculate that this group of people orchestrate most of all hedge funds' total asset base, and by tailing their top stock picks, Insider Monkey has uncovered a few investment strategies that have historically outstripped the market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Oleg Nodelman EcoR1 Capital
Oleg Nodelman EcoR1 Capital

Oleg Nodelman of EcoR1 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. Keeping this in mind let's take a glance at the fresh hedge fund action regarding Alpine Immune Sciences, Inc. (NASDAQ:ALPN).

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

Heading into the second quarter of 2021, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ALPN over the last 23 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is ALPN A Good Stock To Buy?
Is ALPN A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, OrbiMed Advisors, holds the most valuable position in Alpine Immune Sciences, Inc. (NASDAQ:ALPN). OrbiMed Advisors has a $32.6 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Frazier Healthcare Partners, led by Alan Frazier, holding a $27.3 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions consist of Oleg Nodelman's EcoR1 Capital, Srini Akkaraju and Michael Dybbs's Samsara BioCapital 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 2.19% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, setting aside 0.78 percent of its 13F equity portfolio to ALPN.

Judging by the fact that Alpine Immune Sciences, Inc. (NASDAQ:ALPN) has experienced bearish sentiment from the aggregate hedge fund industry, it's easy to see that there were a few money managers who were dropping their positions entirely heading into Q2. It's worth mentioning that Farallon Capital dumped the largest investment of the "upper crust" of funds tracked by Insider Monkey, comprising close to $2.5 million in stock, and Frank Fu's CaaS Capital was right behind this move, as the fund dumped about $1.9 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds heading into Q2.

Let's go over hedge fund activity in other stocks similar to Alpine Immune Sciences, Inc. (NASDAQ:ALPN). These stocks are Wunong Net Technology Company Limited (NASDAQ:WNW), Territorial Bancorp Inc (NASDAQ:TBNK), Galiano Gold Inc. (NYSE:GAU), Energous Corporation (NASDAQ:WATT), Orrstown Financial Services (NASDAQ:ORRF), Stratus Properties Inc. (NASDAQ:STRS), and Professional Holding Corp. (NASDAQ:PFHD). This group of stocks' market valuations are closest to ALPN's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WNW,1,167,1 TBNK,4,22781,-1 GAU,6,30594,1 WATT,6,2777,1 ORRF,4,8233,0 STRS,3,38081,0 PFHD,3,20914,1 Average,3.9,17650,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.9 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $93 million in ALPN's case. Galiano Gold Inc. (NYSE:GAU) is the most popular stock in this table. On the other hand Wunong Net Technology Company Limited (NASDAQ:WNW) 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 overall hedge fund sentiment score for ALPN is 82.2. 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 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Unfortunately ALPN wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ALPN were disappointed as the stock returned -19.1% since the end of the first quarter (through 7/23) 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 most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.