Now, according to many of your fellow readers, hedge funds are seen as useless, old investment tools of a period lost to current times. Although there are more than 8,000 hedge funds in operation today, this site focuses on the aristocrats of this group, about 525 funds. It is assumed that this group has its hands on the majority of the smart money's total assets, and by tracking their highest performing investments, we've determined a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as key, positive insider trading activity is a second way to look at the investments you're interested in. As the old adage goes: there are a number of motivations for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this method if "monkeys" understand what to do (learn more here).
Furthermore, we're going to discuss the recent info about Elan Corporation, plc (ADR) (NYSE:ELN).
Heading into Q3, a total of 47 of the hedge funds we track were bullish in this stock, a change of 42% from one quarter earlier. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were increasing their holdings significantly.
When using filings from the hedgies we track, James Dinan's York Capital Management had the biggest position in Elan Corporation, plc (ADR) (NYSE:ELN), worth close to $235.4 million, comprising 4.9% of its total 13F portfolio. On York Capital Management's heels is Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, which held a $150.1 million position; 4.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Daniel S. Och's OZ Management, Dan Loeb's Third Point and David Cohen and Harold Levy's Iridian Asset Management.
As industrywide interest increased, specific money managers were leading the bulls' herd. York Capital Management, managed by James Dinan, created the biggest position in Elan Corporation, plc (ADR) (NYSE:ELN). York Capital Management had 235.4 million invested in the company at the end of the quarter. Matt Sirovich and Jeremy Mindich's Scopia Capital also made a $150.1 million investment in the stock during the quarter. The other funds with brand new ELN positions are Daniel S. Och's OZ Management, Dan Loeb's Third Point, and David Cohen and Harold Levy's Iridian Asset Management.
Legal insider trading, particularly when it's bullish, is most useful when the company in focus has seen transactions within the past six months. Over the latest 180-day time frame, Elan Corporation, plc (ADR) (NYSE:ELN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to Elan Corporation, plc (ADR) (NYSE:ELN). These stocks are Delcath Systems, Inc. (NASDAQ:DCTH), Petmed Express Inc (NASDAQ:PETS), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Alkermes Plc (NASDAQ:ALKS), and Hospira, Inc. (NYSE:HSP). This group of stocks belong to the drug delivery industry and their market caps are closest to ELN's market cap.