Arena Pharmaceuticals, Inc. (ARNA): The Short Data You Need To See

Nowadays, there are a multitude of indicators for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) traders to pay attention to, but it’s smart to take note of a stock’s shorts. A couple pieces of data typically used are: (a) the percentage of a stock’s shares that bears are presently shorting, and (b) the change in short selling activity.

Augmented bearish shorting typically indicates what you’d think: Wall Street has grown less bullish on a company. Short selling that’s too high, though, sometimes has a bullish effect on share price, as the shorts may be forced to buy their shares.

Within Insider Monkey, it’s no secret that we pay attention to the smart money’s interest, but it’s eqaully as crucial to pair this information with aggregate short sale information. In some high-profile cases, large investors could indicate that they’re bearish on a company, but it is not an SEC requirement. Nevertheless, some retail investors might wish to stay away from heavily short sold companies with high hedge fund investment, while others might want short-squeeze opportunities. For investors searching for a market-beating piggybacking strategy, discover the details of our premium strategy.

With that in mind, let’s take a glance at the key data surrounding Arena Pharmaceuticals, Inc. (NASDAQ:ARNA).

Looking at the latest FINRA short interest data, which is reported twice a month, we can realize that Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) sports a short interest of 26.50% of float. With a total float of 216.49M shares, this is a short ratio of 8.4.

It is also crucial to take note of hedge fund holdings from their 13F filings. Of the funds we track, James E. Flynn’s Deerfield Management had the most valuable position in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), worth close to $43.9 million, accounting for 2.6% of its total 13F portfolio. In the second spot is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $7.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Daniel Gold’s QVT Financial, and Robert Pohly’s Samlyn Capital.

Also, insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past six months. Over the latest six-month time frame, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s check out activity in other stocks similar to Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). These stocks are Charles River Laboratories (NYSE:CRL), Synageva BioPharma Corp (NASDAQ:GEVA), Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), Viropharma Inc (NASDAQ:VPHM), and Questcor Pharmaceuticals Inc (NASDAQ:QCOR). This group of stocks are in the biotechnology industry and their market caps match ARNA’s market cap.

The aforementioned indicators–short interest info, hedge fund holdings and insiders’ behavior–are something every investor should account for. Although it’s difficult to discover a usable strategy from short interest data, hedge fund and insider sentiment provide lots of market beating opportunities if you know where to look.