Hedge Funds Are Selling Arena Pharmaceuticals, Inc. (ARNA)

Page 1 of 2

Here’s why Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) might be a sell.

Now, according to many market players, hedge funds are viewed as delayed, outdated financial tools of an era lost to time. Although there are In excess of 8,000 hedge funds trading today, Insider Monkey looks at the elite of this club, close to 525 funds. It is widely held that this group controls the lion’s share of the smart money’s total assets, and by tracking their highest performing equity investments, we’ve unearthed a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as crucial, optimistic insider trading sentiment is another way to look at the stock market universe. Obviously, there are plenty of reasons for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).

Keeping this in mind, it’s important to discuss the newest info surrounding Arena Pharmaceuticals, Inc. (NASDAQ:ARNA).

How are hedge funds trading Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)?

At the end of the second quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -15% from the previous quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings significantly.

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)When using filings from the hedgies we track, Deerfield Management, managed by James E. Flynn, holds the most valuable position in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). Deerfield Management has a $19.8 million position in the stock, comprising 0.9% of its 13F portfolio. Sitting at the No. 2 spot is Samlyn Capital, managed by Robert Pohly, which held a $12.7 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, and Cliff Asness’s AQR Capital Management.

Because Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has witnessed declining interest from the top-tier hedge fund industry, it’s easy to see that there exists a select few money managers that decided to sell off their entire stakes last quarter. At the top of the heap, Daniel Gold’s QVT Financial dumped the largest stake of the “upper crust” of funds we monitor, valued at close to $6.8 million in stock, and D. E. Shaw of D E Shaw was right behind this move, as the fund said goodbye to about $2.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds last quarter.

What do corporate executives and insiders think about Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)?

Bullish insider trading is most useful when the company in question has experienced transactions within the past six months. Over the latest half-year time frame, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). These stocks are Charles River Laboratories (NYSE:CRL), Synageva BioPharma Corp (NASDAQ:GEVA), Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), Viropharma Inc (NASDAQ:VPHM), and Questcor Pharmaceuticals Inc (NASDAQ:QCOR). This group of stocks are the members of the biotechnology industry and their market caps are closest to ARNA’s market cap.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!