Halozyme Therapeutics, Inc. (NASDAQ:HALO) has seen an increase in hedge fund interest in recent months.
To most stock holders, hedge funds are perceived as worthless, old financial vehicles of years past. While there are more than 8000 funds in operation at the moment, we hone in on the upper echelon of this club, close to 450 funds. It is estimated that this group has its hands on most of the hedge fund industry's total capital, and by watching their best equity investments, we have spotted a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as beneficial, bullish insider trading activity is another way to parse down the stock market universe. There are lots of reasons for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this method if investors know where to look (learn more here).
Consequently, let's take a gander at the latest action encompassing Halozyme Therapeutics, Inc. (NASDAQ:HALO).
In preparation for this year, a total of 12 of the hedge funds we track were bullish in this stock, a change of 9% from one quarter earlier. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, QVT Financial, managed by Daniel Gold, holds the largest position in Halozyme Therapeutics, Inc. (NASDAQ:HALO). QVT Financial has a $25.4 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Baker Bros. Advisors, managed by Julian Baker and Felix Baker, which held a $11.9 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Israel Englander's Millennium Management, Jerome Pfund and Michael Sjostrom's Sectoral Asset Management and John A. Levin's Levin Capital Strategies.
As industrywide interest jumped, key money managers have been driving this bullishness. Sectoral Asset Management, managed by JΘr⌠me Pfund and Michael Sj÷str÷m, assembled the biggest position in Halozyme Therapeutics, Inc. (NASDAQ:HALO). Sectoral Asset Management had 5.8 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also made a $1.1 million investment in the stock during the quarter. The following funds were also among the new HALO investors: Mike Vranos's Ellington, D. E. Shaw's D E Shaw, and Steven Cohen's SAC Capital Advisors.
Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time frame, Halozyme Therapeutics, Inc. (NASDAQ:HALO) has experienced 2 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to Halozyme Therapeutics, Inc. (NASDAQ:HALO). These stocks are InterMune Inc (NASDAQ:ITMN), Merrimack Pharmaceuticals Inc (NASDAQ:MACK), TESARO Inc (NASDAQ:TSRO), ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), and EXACT Sciences Corporation (NASDAQ:EXAS). This group of stocks are the members of the biotechnology industry and their market caps match HALO's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|InterMune Inc (NASDAQ:ITMN)||14||0||0|
|Merrimack Pharmaceuticals Inc (NASDAQ:MACK)||7||3||1|
|TESARO Inc (NASDAQ:TSRO)||2||1||0|
|ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)||12||0||4|
|EXACT Sciences Corporation (NASDAQ:EXAS)||11||2||0|
With the returns shown by the aforementioned strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Halozyme Therapeutics, Inc. (NASDAQ:HALO) shareholders fit into this picture quite nicely.