Is Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) a good investment?
In the 21st century investor’s toolkit, there are plenty of indicators market participants can use to analyze their holdings. A couple of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can beat the broader indices by a very impressive amount (see just how much).
Equally as key, optimistic insider trading activity is another way to analyze the stock market universe. There are many motivations for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this method if “monkeys” know where to look (learn more here).
Furthermore, we’re going to examine the latest info for Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD).
What does the smart money think about Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)?
In preparation for the third quarter, a total of 14 of the hedge funds we track were bullish in this stock, a change of 27% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably.
Out of the hedge funds we follow, Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management had the most valuable position in Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), worth close to $50.5 million, comprising 1.5% of its total 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson of Adage Capital Management, with a $16.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Julian Baker and Felix Baker’s Baker Bros. Advisors, and Michael Novogratz’s Fortress Investment Group.
Now, specific money managers have been driving this bullishness. Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, created the largest position in Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD). Sectoral Asset Management had 50.5 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $16.8 million investment in the stock during the quarter. The following funds were also among the new IRWD investors: Julian Baker and Felix Baker’s Baker Bros. Advisors, Israel Englander’s Millennium Management, and Michael Novogratz’s Fortress Investment Group.
How are insiders trading Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)?
Insider buying made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD). These stocks are PerkinElmer, Inc. (NYSE:PKI), WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX), PAREXEL International Corporation (NASDAQ:PRXL), Alere Inc (NYSE:ALR), and ICON plc – Ordinary Shares (NASDAQ:ICLR). This group of stocks are in the medical laboratories & research industry and their market caps resemble IRWD’s market cap.