We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) and determine whether hedge funds skillfully traded this stock.
Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) investors should be aware of an increase in hedge fund interest of late. Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) was in 23 hedge funds’ portfolios at the end of June. The all time high for this statistics is 27. There were 22 hedge funds in our database with IONS holdings at the end of March. Our calculations also showed that IONS isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
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 56 percentage points since March 2017 (see the details here). We