Hedge fund expert Zachary Egan is head of the $6.76 billion Columbia Wanger Asset Management LLC. According to the latest 13-F filings with SEC, the fund has made quite a few changes in their positions. While Egan rocketed up his fund’s stake in Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE), he seems to have lost confidence in medical device manufacturer stocks Align Technology, Inc. (NASDAQ:ALGN) and LivaNova PLC (NASDAQ:LIVN).
Egan joined Columbia Wanger Asset Management, LLC in 1999 as an International Analyst, covering foreign equities in Germany, Switzerland, Austria, and the United Kingdom, and has been a member of the investment community since 1999. Before joining Columbia Wanger Asset Management, he was a Research Fellow with the Robert Bosch Foundation in Stuttgart. Zachary Egan has investment, business, finance and regulatory experience through his positions as president, international chief investment officer, and director of international research of CWAM, as well as through his more than 15 years of experience as a portfolio manager and/or analyst of CWAM. Egan is C.F.A. charter holder and has an M.A. from the University of Chicago (in 1996) as well as a B.A. from the Middlebury College (in 1990).
According to TipRanks statistics, Columbia Wanger Asset Management LLC (+47.53%) has consistently under-performed both Average Hedge Fund Portfolio (+66.04%) as well as S&P 500 (+105.1%) when comparing measured performance.
Will the fund’s most recent moves help turn this fund around? Let’s take a closer look.
Sells Align Technology, Inc. (NASDAQ:ALGN)
Egan believes his Align Technology position is less favorable than the last quarter, as the hedge fund guru dialed down Columbia Wanger’s holding by 15.56% to shares worth $118.83 million. This proved to be a wrong move, as the stock gained a massive 40.88% since the last filing.
Morgan Stanley analyst Steve Beuchaw raised his price target on Align Technology to $300 from $257 last day. He estimates that the company can capture 50% of an about 400,000 case at-home orthodontic market in the U.S. Pilots of storefront and the coming launch of “Invisalign Go” demonstrate the company’s commitment to the at-home orthodontic market.
Similarly Stifel analyst Jonathan Block is also bullish on ALGN. He said that SmileDirectClub’s success shows the underlying demand that exists among adults for clear aligner treatment. After performing more diligence, Jonathan Block now feels Align’s store front approach can be revolutionary to orthodontic treatment.
According to TipRanks, there is a Strong Buy consensus for Align Tech, with all 7 analysts tracking the stock taking a buy position. The average analyst price target for ALGN is $248.71 which is a downside of -5.22% from the current price of $262.42. However the overall hedge fund sentiment is very negative based on the activity of 14 hedge funds in the recent quarter. Indeed, funds sold a net total of 130,500 Align shares in Q3- with well known healthcare fund manager Andrew Law exiting the stock completely.
Sells LivaNova PLC (NASDAQ:LIVN)
In Q3, Egan began to unload his shares of LivaNova after selling 25.32% of his holding. Nonetheless, Columbia Wanger still has a holding of shares worth $104.78 million. The stock has gained +23.65% since the last filing.
Needham analyst Mike Matson exhibited a bullish stance on LIVN and raised his price target on LivaNova to $93 in his latest report. This was done after the company’s decision to divest its low-growth CRM business. Matson says the sale will increase the company’s organic revenue growth and operating margins, justifying the higher multiple as a result of the EPS dilution.
According to recent reports, LivaNova plc (LIVN) is planning to sell its Cardiac Rhythm Management (CRM) business franchise to MicroPort Scientific for $190 million. The CRM Business Franchise develops, manufactures and markets products for the diagnosis, treatment, and management of heart rhythm disorders and heart failures. The CRM Business Franchise generated approximately $249 million in net sales in fiscal year 2016.
Analysts are cautiously optimistic on the stock, with TipRanks showing a Moderate Buy analyst consensus rating. Based on 6 analysts polled by TipRanks in the last 3 months, 4 rate the stock a Buy while 2 maintain a Hold. The 12-month average price target stands at $83.60, marking a -3.50% downside from where the stock is currently trading.
Buys Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)
Columbia Wanger Asset Management bumped up its stake in Ultragenyx Pharmaceutical Inc. by 17% during Q3. The fund’s current holdings on RARE worth $85.02 million took a hit when the stock plunged by -10.91% since the last filing.
Ultragenyx is a clinical-stage biopharmaceutical company committed to bringing to market novel products for the treatment of rare and ultra-rare diseases, with a focus on serious, debilitating genetic diseases.
Ultragenyx recently landed FDA approval of its first drug, a treatment for an ultra-rare disease known as MPS VII that will cost $375,000 a year. RARE’s enzyme replacement therapy Mepsevii™ (vestronidase alfa) is the first treatment authorized by the agency for children and adults with mucopolysaccharidosis VII (MPS VII), also called Sly syndrome.
RARE has also completed patient dosing in the first cohort of three patients enrolled in the Phase 1/2 study of DTX301, an adeno-associated virus (AAV) gene therapy for the treatment of ornithine transcarbamylase (OTC) deficiency. Initial data from this first cohort of three patients is expected in early 2018.
The Street seems to side with Egan’s bullish stance, as TipRanks analytics indicate RARE as a Moderate Buy. Out of 9 analysts polled by TipRanks in the last 3 months, 6 are bullish on the stock while 3 remain sidelined. With a return potential of nearly 49%, the stock’s consensus target price stands at $70.63.
Which ‘Strong Buy’ stocks are the best fund managers buying right now?
TipRanks tracks and ranks over 200 hedge fund managers. Follow the quarterly activity of the Top 25 hedge fund managers with the best portfolio performance to maximize your own returns.
