Is Amicus Therapeutics, Inc. (NASDAQ:FOLD) a marvelous investment today? Money managers are becoming less confident. The number of bullish hedge fund bets dropped by 3 in recent months.
In the eyes of most stock holders, hedge funds are assumed to be slow, old investment tools of yesteryear. While there are more than 8000 funds trading at present, we look at the crème de la crème of this group, close to 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry's total asset base, and by keeping an eye on their top investments, we have found a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, positive insider trading sentiment is a second way to break down the financial markets. Obviously, there are a variety of stimuli for an insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if "monkeys" understand where to look (learn more here).
With all of this in mind, we're going to take a look at the key action encompassing Amicus Therapeutics, Inc. (NASDAQ:FOLD).
At year's end, a total of 8 of the hedge funds we track held long positions in this stock, a change of -27% from the previous quarter. With hedgies' capital changing hands, there exists a few key hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, William Leland Edwards's Palo Alto Investors had the most valuable position in Amicus Therapeutics, Inc. (NASDAQ:FOLD), worth close to $12.8 million, comprising 1.5% of its total 13F portfolio. On Palo Alto Investors's heels is Arthur B Cohen and Joseph Healey of Healthcor Management LP, with a $6.1 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Julian Baker and Felix Baker's Baker Bros. Advisors, Dmitry Balyasny's Balyasny Asset Management and Anthony Giammalva's Sound Energy Partners.
Since Amicus Therapeutics, Inc. (NASDAQ:FOLD) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain "tier" of hedgies who sold off their positions entirely last quarter. It's worth mentioning that Robert Pohly's Samlyn Capital dumped the largest stake of the 450+ funds we track, worth about $3.1 million in stock.. Richard Driehaus's fund, Driehaus Capital, also dropped its stock, about $0.9 million worth. These transactions are interesting, as total hedge fund interest dropped by 3 funds last quarter.
Insider trading activity, especially when it's bullish, is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time frame, Amicus Therapeutics, Inc. (NASDAQ:FOLD) has seen 2 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's check out hedge fund and insider activity in other stocks similar to Amicus Therapeutics, Inc. (NASDAQ:FOLD). These stocks are Cytokinetics, Inc. (NASDAQ:CYTK), ArQule, Inc. (NASDAQ:ARQL), ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), Pain Therapeutics, Inc. (NASDAQ:PTIE), and BioDelivery Sciences International, Inc. (NASDAQ:BDSI). This group of stocks are in the biotechnology industry and their market caps are closest to FOLD's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Cytokinetics, Inc. (NASDAQ:CYTK)||7||0||1|
|ArQule, Inc. (NASDAQ:ARQL)||13||0||0|
|ZIOPHARM Oncology Inc. (NASDAQ:ZIOP)||6||1||0|
|Pain Therapeutics, Inc. (NASDAQ:PTIE)||11||0||0|
|BioDelivery Sciences International, Inc. (NASDAQ:BDSI)||9||2||2|
With the returns exhibited by our time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Amicus Therapeutics, Inc. (NASDAQ:FOLD) shareholders fit into this picture quite nicely.