Is Theravance Inc (NASDAQ:THRX) an excellent investment now? Prominent investors are buying. The number of long hedge fund bets improved by 6 in recent months.
In the eyes of most investors, hedge funds are seen as slow, old investment vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the moguls of this club, close to 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total asset base, and by monitoring their top picks, we have revealed a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, bullish insider trading sentiment is another way to break down the financial markets. Obviously, there are a number of reasons for an executive to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).
Keeping this in mind, we’re going to take a peek at the recent action regarding Theravance Inc (NASDAQ:THRX).
What does the smart money think about Theravance Inc (NASDAQ:THRX)?
At the end of the first quarter, a total of 17 of the hedge funds we track were long in this stock, a change of 55% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Seth Klarman’s Baupost Group had the biggest position in Theravance Inc (NASDAQ:THRX), worth close to $320.1 million, accounting for 10.3% of its total 13F portfolio. Coming in second is David Cohen and Harold Levy of Iridian Asset Management, with a $92.4 million position; 1.4% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Jamie Zimmerman’s Litespeed Management and Jean-Marie Eveillard’s First Eagle Investment Management.
As one would reasonably expect, some big names were leading the bulls’ herd. SAC Capital Advisors, managed by Steven Cohen, created the most outsized position in Theravance Inc (NASDAQ:THRX). SAC Capital Advisors had 8 million invested in the company at the end of the quarter. John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co also made a $7.4 million investment in the stock during the quarter. The following funds were also among the new THRX investors: SAC Subsidiary’s CR Intrinsic Investors, Jacob Gottlieb’s Visium Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
What do corporate executives and insiders think about Theravance Inc (NASDAQ:THRX)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Theravance Inc (NASDAQ:THRX) has experienced 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Theravance Inc (NASDAQ:THRX). These stocks are Incyte Corporation (NASDAQ:INCY), Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), Questcor Pharmaceuticals Inc (NASDAQ:QCOR), Charles River Laboratories (NYSE:CRL), and Infinity Pharmaceuticals Inc. (NASDAQ:INFI). This group of stocks belong to the biotechnology industry and their market caps match THRX’s market cap.