Is Zogenix, Inc. (NASDAQ:ZGNX) a healthy stock for your portfolio? Hedge funds are betting on the stock. The number of long hedge fund positions rose by 1 in recent months.
In today’s marketplace, there are a multitude of gauges shareholders can use to analyze the equity markets. Some of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outpace the S&P 500 by a significant amount (see just how much).
Just as important, positive insider trading activity is another way to parse down the investments you're interested in. As the old adage goes: there are lots of reasons for an executive to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this method if piggybackers understand what to do (learn more here).
With all of this in mind, it's important to take a look at the latest action surrounding Zogenix, Inc. (NASDAQ:ZGNX).
At the end of the fourth quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of 17% from one quarter earlier. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings substantially.
According to our comprehensive database, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the largest position in Zogenix, Inc. (NASDAQ:ZGNX). Baker Bros. Advisors has a $2.7 million position in the stock, comprising 0.1% of its 13F portfolio. On Baker Bros. Advisors's heels is Royce & Associates, managed by Chuck Royce, which held a $2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Israel Englander's Millennium Management, James E. Flynn's Deerfield Management and Gregory Fraser, Rudolph Kluiber, and Timothy Kroch's GRT Capital Partners.
As aggregate interest increased, key money managers have jumped into Zogenix, Inc. (NASDAQ:ZGNX) headfirst. Deerfield Management, managed by James E. Flynn, assembled the most outsized position in Zogenix, Inc. (NASDAQ:ZGNX). Deerfield Management had 1.3 million invested in the company at the end of the quarter.
Insider trading activity, especially when it's bullish, is at its handiest when the company we're looking at has experienced transactions within the past six months. Over the last half-year time frame, Zogenix, Inc. (NASDAQ:ZGNX) has seen 4 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to Zogenix, Inc. (NASDAQ:ZGNX). These stocks are Horizon Pharma Inc (NASDAQ:HZNP), Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE), AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), SIGA Technologies, Inc. (NASDAQ:SIGA), and TherapeuticsMD Inc (OTC:TXMD). All of these stocks are in the drug manufacturers - major industry and their market caps match ZGNX's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Horizon Pharma Inc (NASDAQ:HZNP)||7||0||5|
|Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE)||1||0||0|
|AcelRx Pharmaceuticals Inc (NASDAQ:ACRX)||6||1||0|
|SIGA Technologies, Inc. (NASDAQ:SIGA)||3||0||0|
|TherapeuticsMD Inc (OTC:TXMD)||0||0|
With the results shown by our studies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Zogenix, Inc. (NASDAQ:ZGNX) shareholders fit into this picture quite nicely.