Here’s why ClearBridge Investments sold its stake in Alexion Pharmaceuticals (ALXN).
ClearBridge Investments, an investment management company, has released its 2021 First Quarter Large Cap Growth Strategy investor letter – a copy of which can be downloaded here. The ClearBridge Large Cap Growth Strategy underperformed its benchmark Russell 1000 Growth Index in the first quarter. On an absolute basis, the strategy generated gains in four of the eight sectors in which it was invested (out of 11 sectors in total). You can check out the fund’s top 5 holdings to take a look at their top bets for 2021.
ClearBridge Investments mentioned Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) in its Q1 2021 Investor Letter and shared its insights on the company. Alexion Pharmaceuticals, Inc. is a Boston, Massachusetts-based pharmaceutical company that currently has a market capitalization of $40.1 billion. Year-to-date, ALXN has returned 16.23%, extending its 12-month gains to 60.13%. On June 14, 2021, the stock closed at $181.65 per share.
Here is what ClearBridge Investments has to say about Alexion Pharmaceuticals, Inc. in its Investor Letter for Q1 2021:
“We also sold the biotechnology holding Alexion Pharmaceuticals prior to its acquisition by AstraZeneca, but expect to double our healthcare efforts by the end of the year. We see good growth potential in the industry and after careful consideration have been busy filling our wish list with new names we would like to own.”
adriaticfoto/Shutterstock.com Our calculations show that Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) does not make our list of the top 30 most popular stocks among hedge funds. At the end of the first quarter of 2021, Alexion Pharmaceuticals, Inc. was included 77 hedge fund portfolios. ALXN has returned 18.39% over the past 3 months.
Hedge funds’ reputation as smart investors has been tarnished over the past decade as their hedged returns have not been able to match the unhedged returns of market indexes. Our research has shown that hedge fund small-cap stock selection was able to outperform the market by double digits annually between 1999 and 2016, but the margin of outperformance has declined in recent years. Nonetheless, we were able to ahead of time identify a select group of hedge fund holdings that have outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to anticipate a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We’ve been following and sharing the list of these stocks in our quarterly newsletter since February 2017.
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Disclosure: None. This article was originally published on Insider Monkey.