Depomed Inc (NASDAQ:DEPO) was in 13 hedge funds’ portfolio at the end of the first quarter of 2013. DEPO shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. There were 11 hedge funds in our database with DEPO holdings at the end of the previous quarter.
In the 21st century investor’s toolkit, there are many gauges market participants can use to monitor the equity markets. Some of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can outperform their index-focused peers by a solid margin (see just how much).
Equally as important, positive insider trading activity is a second way to break down the financial markets. There are a number of stimuli for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).
Keeping this in mind, let’s take a peek at the recent action regarding Depomed Inc (NASDAQ:DEPO).
Hedge fund activity in Depomed Inc (NASDAQ:DEPO)
At the end of the first quarter, a total of 13 of the hedge funds we track were long in this stock, a change of 18% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Broadfin Capital, managed by Kevin Kotler, holds the most valuable position in Depomed Inc (NASDAQ:DEPO). Broadfin Capital has a $18.5 million position in the stock, comprising 4.1% of its 13F portfolio. The second largest stake is held by James E. Flynn of Deerfield Management, with a $1.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Ken Griffin’s Citadel Investment Group, Glenn Russell Dubin’s Highbridge Capital Management and Israel Englander’s Millennium Management.
As one would reasonably expect, key money managers were leading the bulls’ herd. Highbridge Capital Management, managed by Glenn Russell Dubin, created the largest position in Depomed Inc (NASDAQ:DEPO). Highbridge Capital Management had 1.4 million invested in the company at the end of the quarter. SAC Subsidiary’s CR Intrinsic Investors also made a $0.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew Tewksbury’s Stevens Capital Management.
How have insiders been trading Depomed Inc (NASDAQ:DEPO)?
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time frame, Depomed Inc (NASDAQ:DEPO) has seen 2 unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Depomed Inc (NASDAQ:DEPO). These stocks are Synergy Pharmaceuticals Inc (NASDAQ:SGYP), SciClone Pharmaceuticals, Inc. (NASDAQ:SCLN), Dynavax Technologies Corporation (NASDAQ:DVAX), Sucampo Pharmaceuticals, Inc. (NASDAQ:SCMP), and Lannett Company, Inc. (NYSEAMEX:LCI). This group of stocks belong to the drug manufacturers – other industry and their market caps are similar to DEPO’s market cap.