Fidelity Investments buys a big stake in Abiomed

November 11, 2009 by MassDevice staff

The mutual fund company snapped up 2.3 million shares between July and September and now controls 12.7 percent of the Danvers, Mass.-based cardiac assist device maker.

Fidelity Investments is taking a shine to Abiomed Inc. (ABMD) stock again.

Portfolio managers with the Boston-based mutual-fund giant have been big buyers of Abiomed stock this year, purchasing over 2.35 million shares of the Danvers, Mass.-based device maker during the three months ended Sept. 30. That follows a 2.1-million-share buying spree during the prior quarter, boosting the funds' overall stake to 4.75 million shares, according to new stock ownership reports.

Abiomed shares rose 10.1 percent during the third quarter, finishing at $9.71 each and is now just a penny shy of doubling its $4.67 low in early March. Fidelity's support has been instrumental in that surge, with its funds responsible for nearly 29 percent of all activity in Abiomed stock between July and September.

The buying spree signals a shift in attitude inside Fidelity toward Abiomed. In an April 30 update to shareholders of the Primecap Odyssey Growth fund (POAGX), managers of the mid-cap blended fund noted Abiomed was among its worst-performing holdings last winter.

"On the negative side ... health care stocks were major detractors from performance," they wrote. "Abiomed, which had been one of the largest positive contributors to performance in the previous fiscal year, was down 54 percent."

Primecap Odyssey held 350,000 Abiomed shares through Sept. 30. The stock had enjoyed a 41.8-percent pop during 2008 after receiving regulatory clearances for the Impella, a small ventricular device used to assist blood flow to an injured heart.

Gavin Baker, manager of the Fidelity OTC Portfolio fund (FOCPX), appears to be the heaviest buyer of Abiomed stock this year, purchasing just over 1 million shares since February. Other major holders include the New Millenium fund (FMILX), with 250,000 shares, and the aptly named Select Medical Equipment and Systems Portfolio fund (FSMEX), owner of 800,000 Abiomed shares as of Sept. 30.