Is Geron Corporation (NASDAQ:GERN) a buy right now? Money managers are becoming less hopeful. The number of bullish hedge fund positions were trimmed by 2 in recent months.
To most investors, hedge funds are assumed to be worthless, old investment tools of the past. While there are over 8000 funds in operation today, we at Insider Monkey choose to focus on the elite of this club, about 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by tracking their best investments, we have brought to light a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as important, optimistic insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are a number of stimuli for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if shareholders know where to look (learn more here).
Keeping this in mind, it’s important to take a gander at the recent action regarding Geron Corporation (NASDAQ:GERN).
Hedge fund activity in Geron Corporation (NASDAQ:GERN)
Heading into Q2, a total of 5 of the hedge funds we track were long in this stock, a change of -29% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings considerably.
When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Geron Corporation (NASDAQ:GERN). First Eagle Investment Management has a $2.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $1.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Julian Baker and Felix Baker’s Baker Bros. Advisors, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.
Seeing as Geron Corporation (NASDAQ:GERN) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedgies that decided to sell off their positions entirely last quarter. At the top of the heap, Steven Cohen’s SAC Capital Advisors sold off the largest investment of all the hedgies we key on, totaling an estimated $0 million in stock.. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $0 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds last quarter.
Insider trading activity in Geron Corporation (NASDAQ:GERN)
Insider buying is best served when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time period, Geron Corporation (NASDAQ:GERN) has experienced 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the results shown by the aforementioned time-tested strategies, retail investors should always watch hedge fund and insider trading sentiment, and Geron Corporation (NASDAQ:GERN) is an important part of this process.