Is it smart to be bullish on Dyax Corp. (NASDAQ:DYAX)?
Now, according to many of your fellow readers, hedge funds are viewed as delayed, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds trading today, this site focuses on the moguls of this club, around 525 funds. Analysts calculate that this group controls the lion's share of the smart money's total assets, and by paying attention to their highest performing equity investments, we've deciphered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as useful, positive insider trading sentiment is a second way to analyze the stock market universe. Just as you'd expect, there are plenty of motivations for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).
What's more, let's discuss the latest info for Dyax Corp. (NASDAQ:DYAX).
At the end of the second quarter, a total of 15 of the hedge funds we track were long in this stock, a change of 15% from the previous quarter. With hedge funds' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes significantly.
When using filings from the hedgies we track, Peter Kolchinsky's RA Capital Management had the biggest position in Dyax Corp. (NASDAQ:DYAX), worth close to $37.7 million, comprising 5% of its total 13F portfolio. The second largest stake is held by Joseph Edelman of Perceptive Advisors, with a $6 million position; 0.6% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Chuck Royce's Royce & Associates, Daniel Gold's QVT Financial and D. E. Shaw's D E Shaw.
As one would understandably expect, specific money managers were breaking ground themselves. RA Capital Management, managed by Peter Kolchinsky, established the most valuable position in Dyax Corp. (NASDAQ:DYAX). RA Capital Management had 37.7 million invested in the company at the end of the quarter. Joseph Edelman's Perceptive Advisors also initiated a $6 million position during the quarter. The following funds were also among the new DYAX investors: Chuck Royce's Royce & Associates, Daniel Gold's QVT Financial, and D. E. Shaw's D E Shaw.
Legal insider trading, particularly when it's bullish, is best served when the company in question has seen transactions within the past 180 days. Over the last half-year time frame, Dyax Corp. (NASDAQ:DYAX) 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 Dyax Corp. (NASDAQ:DYAX). These stocks are Cambrex Corporation (NYSE:CBM), Sequenom, Inc. (NASDAQ:SQNM), Idenix Pharmaceuticals Inc (NASDAQ:IDIX), Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), and QLT Inc. (USA) (NASDAQ:QLTI). This group of stocks are the members of the biotechnology industry and their market caps match DYAX's market cap.