10 Stocks to Buy According to Neil Shahrestani’s Ikarian Capital
In this article, we will take a look at the 10 stocks to buy according to Neil Shahrestani's Ikarian Capital. To skip our detailed analysis of Shahrestani's history, hedge fund performance, and investment philosophy, go directly to the 5 Stocks to Buy According to Neil Shahrestani's Ikarian Capital.
Neil Shahrestani, MD, is the Chief Investment Officer, managing member, and co-founder of Dallas-based Ikarian Capital, which was founded in 2015. The hedge fund mainly invests in biotechnology and pharmaceuticals companies. Shahrestani graduated with honors from Columbia University with a degree in Economics and from medical school with honors before moving to work on Wall Street for Goldman Sachs and subsequently for SAC Capital before co-founding Ikarian Capital.
Dr. Shahrestani's medical and financial backgrounds make him particularly prepared to assess and invest in pharmaceutical firms. Ikarian Capital has majority of its investments in finance and healthcare sector. The hedge fund’s 13F portfolio is valued at approximately $2.96 billion as of the end of the first quarter of 2021.
Neil Shahrestani likes to diversify his portfolio. As a result, his hedge fund has stakes in companies with strong fundamentals and future growth potential. Some of these companies include Eli Lilly and Company (NYSE: LLY), BeiGene, Ltd. (NASDAQ: BGNE), and AstraZeneca PLC (NASDAQ: AZN).
Eli Lilly and Company (NYSE: LLY) discovers, develops, and markets pharmaceuticals globally. The company’s shares have returned 62.02% to investors over the course of the past 12 months. On July 26, Truist analyst Robyn Karnauskas initiated a coverage on Eli Lilly and Company (NYSE: LLY) with a "Buy rating" and a price target of $262. The stock is a new arrival on Neil Shahrestani's portfolio, as his hedge fund bought about 125,000 shares of the company, worth $23.35 million. There were 55 hedge funds in our database that held stakes in Eli Lilly and Company (NYSE: LLY) at the end of the first quarter of 2021, compared to 50 funds in the quarter earlier.
Ikarian Capital holds 10,500 call options in BeiGene, Ltd. (NASDAQ: BGNE) worth over $3.65 million. BeiGene, Ltd. (NASDAQ: BGNE) is a commercial-stage biopharmaceutical company. On June 14, SVB Leerink analyst Andrew Berens raised the price target on BeiGene, Ltd. (NASDAQ: BGNE) to $417 from $388 and kept an “Outperform” rating on the shares.
Ikarian Capital has $17 million worth of CALL options in AstraZeneca PLC (NASDAQ: AZN) of the end of the first quarter. On July 21, Citi analyst Andrew Baum raised the price target on AstraZeneca PLC (NASDAQ: AZN) to 10,500 GBp from 10,000 GBp and reiterated a “Buy” rating on the shares.
Photo by National Cancer Institute on Unsplash
Why pay attention to Neil Shahrestani's stock picks? Insider Monkey's research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter's stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That's why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best stocks to buy according to Neil Shahrestani's Ikarian Capital. We used Shahrestani's 13F portfolio for the first quarter for this analysis.
Best Stocks to Buy According to Neil Shahrestani's Ikarian Capital
10. Lyra Therapeutics, Inc. (NASDAQ: LYRA)
Shahrestani's Stake Value: $9,048,000 Percentage of Neil Shahrestani's 13F Portfolio: 0.30% Number of Hedge Fund Holders: 5
Lyra Therapeutics, Inc. (NASDAQ: LYRA) is a clinical-stage pharmaceutical business that focuses on developing and marketing innovative integrated drugs for the localized treatment of ear, nose, and throat illnesses. It was founded in 2005 and is placed tenth on the list of 10 best stocks to buy according to Neil Shahrestani's Ikarian Capital. Lyra Therapeutics, Inc. (NASDAQ: LYRA) currently has an $83.73 million market capitalization.
On June 30, Lyra Therapeutics, Inc. (NASDAQ: LYRA) declared that the pharmacodynamics trial of LYR-210 in grown-ups with chronic rhinosinusitis, an inflammatory condition of the paranasal sinuses, yielded excellent topline results. On June 2, Lyra Therapeutics and LianBio announced a strategic alliance and exclusive license agreement in Greater China, South Korea, Singapore, and Thailand to develop and commercialize LYR-210. LYR-210 is a late-stage development anti-inflammatory intra-nasal drug matrix for the treatment of chronic rhinosinusitis. Lyra will receive a $12 million down payment and collect up to $135 million in installments.
Ikarian Capital holds 780,728 shares in Lyra Therapeutics, Inc. (NASDAQ: LYRA) worth $9.05 million, representing 0.3% of their portfolio. Out of the hedge funds being tracked by Insider Monkey, Perceptive Advisors is a leading shareholder in Lyra Therapeutics, Inc. (NASDAQ: LYRA) with 3.22 million shares worth more than $37 million.
Just like Eli Lilly and Company (NYSE: LLY), BeiGene, Ltd. (NASDAQ: BGNE), and AstraZeneca PLC (NASDAQ: AZN), Lyra Therapeutics, Inc. (NASDAQ: LYRA) is one of the best stocks to buy according to Neil Shahrestani's Ikarian Capital.
9. Vaxcyte, Inc. (NASDAQ: PCVX)
Shahrestani's Stake Value: $9,897,000 Percentage of Neil Shahrestani's 13F Portfolio: 0.33% Number of Hedge Fund Holders: 10
Vaxcyte, Inc. (NASDAQ: PCVX) is a preclinical-stage biotechnology vaccine firm that creates new vaccines to prevent or treat infectious diseases around the world. It was incorporated in 2013 and stands ninth on the list of 10 best stocks to buy according to Neil Shahrestani's Ikarian Capital. Vaxcyte shares have offered investors returns exceeding 22% over the course of the past 3 months.
On May 11, Vaxcyte, Inc. (NASDAQ: PCVX) posted earnings results for the first three months of 2021. The earnings per share was -$0.41, beating market predictions by $0.10. On June 24, Jefferies analyst Kelechi Chikere initiated a coverage on Vaxcyte with a “Buy” rating and price target of $50.
Ikarian Capital holds 501,110 shares in Vaxcyte, Inc. (NASDAQ: PCVX), worth over $9 million. This represents 0.33% of their portfolio. The hedge fund's stake in Vaxcyte, Inc. (NASDAQ: PCVX) increased by 82% in the first quarter of 2021, the latest data reveals. The biggest stakeholder of the company is RA Capital Management, with 3.87 million shares worth $76.35 million. Just like Eli Lilly and Company (NYSE: LLY), BeiGene, Ltd. (NASDAQ: BGNE), and AstraZeneca PLC (NASDAQ: AZN), Vaxcyte, Inc. (NASDAQ: PCVX) is one of the best stocks to buy according to Neil Shahrestani's Ikarian Capital.
8. Relmada Therapeutics, Inc. (NASDAQ: RLMD)
Shahrestani's Stake Value: $10,218,000 Percentage of Neil Shahrestani's 13F Portfolio: 0.34% Number of Hedge Fund Holders: 10
Relmada Therapeutics, Inc. (NASDAQ: RLMD) is a clinical-stage biotechnology organization that concentrates on creating medications to treat focal sensory system infections. The company was founded in 2004 and stands eighth on the list of 10 best stocks to buy according to Neil Shahrestani's Ikarian Capital. Relmada Therapeutics, Inc. (NASDAQ: RLMD) currently has a $436.7 million market capitalization.
On July 28, Truist analyst Joon Lee raised the price target on Relmada Therapeutics, Inc. (NASDAQ: RLMD) to $90 from $75 and kept a “Buy” rating on the shares. On July 20, Arbormentis agreed to sell its development and commercial rights to unique psilocybin and derivate program to Relmada Therapeutics (NASDAQ: RLMD) for up to $165 million. The two businesses will work together to discover different treatments for neurological and mental illnesses.
Neil Shahrestani's Ikarian Capital owns 290,207 shares of Relmada Therapeutics (NASDAQ: RLMD), worth $10.22 million. VenBio Select Advisor, with 1.53 million shares, is the most significant stakeholder in the company. Just like Eli Lilly and Company (NYSE: LLY), BeiGene, Ltd. (NASDAQ: BGNE), and AstraZeneca PLC (NASDAQ: AZN), Relmada Therapeutics (NASDAQ: RLMD) is one of the best stocks to buy according to Neil Shahrestani's Ikarian Capital.
7. Milestone Pharmaceuticals Inc. (NASDAQ: MIST)
Shahrestani's Stake Value: $10,633,000 Percentage of Neil Shahrestani's 13F Portfolio: 0.35% Number of Hedge Fund Holders: 8
Milestone Pharmaceuticals Inc. (NASDAQ: MIST) specializes in cardiovascular medicines. The company was incorporated in 2003 and stands seventh on the list of 10 best stocks to buy according to Neil Shahrestani's Ikarian Capital. Milestone Pharmaceuticals Inc. (NASDAQ: MIST) currently has a $170.12 million market capitalization.
Milestone Pharmaceuticals Inc. (NASDAQ: MIST) posted earnings for the first quarter of 2021. It reported earnings per share of -$0.30, beating market predictions by $0.03. On May 3, H.C. Wainwright analyst Patrick Trucchio initiated a coverage on Milestone Pharmaceuticals with a “Buy” rating and price target of $20.
The hedge fund managed by Neil Shahrestani owns 1.84 million shares in Milestone Pharmaceuticals Inc. (NASDAQ: MIST) worth over $10 million, representing 0.35% of their portfolio. Samuel Isaly's OrbiMed Advisors is the company’s most significant stakeholder, with 2.58 million shares worth $14.96 million. Just like Eli Lilly and Company (NYSE: LLY), BeiGene, Ltd. (NASDAQ: BGNE), and AstraZeneca PLC (NASDAQ: AZN), Milestone Pharmaceuticals Inc. (NASDAQ: MIST) is one of the best stocks to buy according to Neil Shahrestani's Ikarian Capital.
6. Prothena Corporation plc (NASDAQ: PRTA)
Shahrestani's Stake Value: $10,989,000 Percentage of Neil Shahrestani's 13F Portfolio: 0.37% Number of Hedge Fund Holders: 17
Prothena Corporation plc (NASDAQ: PRTA) is a late-stage clinical organization that works on novel treatments for fatal diseases in the United States. It was incorporated in 2012 and ranks sixth on the list of 10 best stocks to buy according to Neil Shahrestani's Ikarian Capital. Prothena shares have offered 312.46% in returns to investors over the course of the past 3 months.
On July 19, NVO RBC Capital analyst Kennen MacKay raised the price target on Prothena Corporation plc (NASDAQ: PRTA) to $59 from $50 and kept an "Outperform" rating shares. On July 12, Prothena and Novo Nordisk A/S (NYSE: NVO) struck a buy agreement under which Novo Nordisk obtained Prothena's clinical-stage counteracting agent PRX004 and more extensive ATTR amyloidosis program. As a result, Prothena Corporation plc (NASDAQ: PRTA) is eligible for up to $1.2 billion payments.
Ikarian Capital trimmed its stake in Prothena Corporation plc (NASDAQ: PRTA) by 64% to 437,430 shares in the first quarter of 2021. Out of the hedge funds being tracked by Insider Monkey, EcoR1 Capital is a leading shareholder in Prothena with 11.03 million shares worth more than $277 million. Just like Eli Lilly and Company (NYSE: LLY), BeiGene, Ltd. (NASDAQ: BGNE), and AstraZeneca PLC (NASDAQ: AZN), Prothena Corporation plc (NASDAQ: PRTA) is one of the best stocks to buy according to Neil Shahrestani's Ikarian Capital.
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Disclosure: None. 10 Stocks to Buy According to Neil Shahrestani's Ikarian Capital is originally published on Insider Monkey.