Is Celgene Corporation (NASDAQ:CELG) undervalued? Hedge funds are getting more optimistic. The number of long hedge fund positions advanced by 3 in recent months.
To most traders, hedge funds are viewed as slow, old investment vehicles of the past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the aristocrats of this club, close to 450 funds. It is widely believed that this group oversees the majority of the smart money's total asset base, and by keeping an eye on their best equity investments, we have revealed a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 25 percentage points in 6.5 month (explore the details and some picks here).
Just as key, positive insider trading activity is another way to break down the marketplace. As the old adage goes: there are plenty of stimuli 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 academic studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).
Consequently, it's important to take a peek at the key action encompassing Celgene Corporation (NASDAQ:CELG).
At year's end, a total of 42 of the hedge funds we track held long positions in this stock, a change of 8% from the third quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, D. E. Shaw's D E Shaw had the most valuable position in Celgene Corporation (NASDAQ:CELG), worth close to $139 million billion, accounting for 0.3% of its total 13F portfolio. On D E Shaw's heels is Legg Mason Capital Management, managed by Bill Miller, which held a $108 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Jim Simons's Renaissance Technologies, Arthur B Cohen and Joseph Healey's Healthcor Management LP and Jérôme Pfund and Michael Sjöström's Sectoral Asset Management.
As one would reasonably expect, some big names were breaking ground themselves. Deerfield Management, managed by James E. Flynn, initiated the largest position in Celgene Corporation (NASDAQ:CELG). Deerfield Management had 22 million invested in the company at the end of the quarter. Donald Chiboucis's Columbus Circle Investors also made a $22 million investment in the stock during the quarter. The following funds were also among the new CELG investors: , Robert Emil Zoellner's Alpine Associates, and Glenn Russell Dubin's Highbridge Capital Management.
Bullish insider trading is best served when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time period, Celgene Corporation (NASDAQ:CELG) has experienced 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns shown by our tactics, everyday investors must always monitor hedge fund and insider trading activity, and Celgene Corporation (NASDAQ:CELG) is an important part of this process.
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