Is Seattle Genetics, Inc. (NASDAQ:SGEN) a healthy stock for your portfolio? The smart money is in a pessimistic mood. The number of long hedge fund positions decreased by 1 lately.
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Just as important, bullish insider trading activity is another way to break down the world of equities. As the old adage goes: there are plenty of motivations for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if "monkeys" know where to look (learn more here).
Consequently, let's take a gander at the latest action surrounding Seattle Genetics, Inc. (NASDAQ:SGEN).
Heading into 2013, a total of 8 of the hedge funds we track were bullish in this stock, a change of -11% from the third quarter. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes considerably.
According to our comprehensive database, Julian Baker and Felix Baker's Baker Bros. Advisors had the biggest position in Seattle Genetics, Inc. (NASDAQ:SGEN), worth close to $447.7 million, comprising 11.7% of its total 13F portfolio. Coming in second is Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, which held a $10.1 million position; 0.4% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Jim Simons's Renaissance Technologies, Israel Englander's Millennium Management and Ken Griffin's Citadel Investment Group.
Judging by the fact that Seattle Genetics, Inc. (NASDAQ:SGEN) has experienced falling interest from the smart money, it's easy to see that there lies a certain "tier" of fund managers who sold off their positions entirely heading into 2013. At the top of the heap, Richard Driehaus's Driehaus Capital dumped the biggest investment of the 450+ funds we track, valued at close to $3.5 million in stock.. John Overdeck and David Siegel's fund, Two Sigma Advisors, also dumped its stock, about $0.2 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds heading into 2013.
Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past six months. Over the last half-year time period, Seattle Genetics, Inc. (NASDAQ:SGEN) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let's also examine hedge fund and insider activity in other stocks similar to Seattle Genetics, Inc. (NASDAQ:SGEN). These stocks are Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX), Incyte Corporation (NASDAQ:INCY), Jazz Pharmaceuticals plc - Ordinary Shares (NASDAQ:JAZZ), Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA), and Medivation Inc (NASDAQ:MDVN). All of these stocks are in the biotechnology industry and their market caps are similar to SGEN's market cap.