To many investors, hedge funds are viewed as delayed, outdated financial vehicles of a forgotten age. Although there are more than 8,000 hedge funds with their doors open today, this site looks at the elite of this group, around 525 funds. It is widely held that this group controls most of all hedge funds' total capital, and by monitoring their highest quality investments, we've uncovered a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat 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 trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as useful, optimistic insider trading sentiment is another way to analyze the stock market universe. Just as you'd expect, there are lots of motivations for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).
Thus, let's discuss the newest info for Emergent Biosolutions Inc (NYSE:EBS).
In preparation for the third quarter, a total of 14 of the hedge funds we track were bullish in this stock, a change of -7% from the previous quarter. With hedge funds' capital changing hands, there exists a few key hedge fund managers who were boosting their holdings significantly.
When using filings from the hedgies we track, Kevin Kotler's Broadfin Capital had the most valuable position in Emergent Biosolutions Inc (NYSE:EBS), worth close to $15.5 million, comprising 3% of its total 13F portfolio. Coming in second is Kingdon Capital, managed by Mark Kingdon, which held a $10.8 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Jim Simons's Renaissance Technologies, Steven Cohen's SAC Capital Advisors and Cliff Asness's AQR Capital Management.
Since Emergent Biosolutions Inc (NYSE:EBS) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few fund managers who sold off their entire stakes heading into Q2. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital sold off the largest stake of all the hedgies we track, comprising close to $0.6 million in stock, and Glenn Russell Dubin of Highbridge Capital Management was right behind this move, as the fund cut about $0.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q2.
Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, Emergent Biosolutions Inc (NYSE:EBS) has seen zero unique insiders purchasing, and zero 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 Emergent Biosolutions Inc (NYSE:EBS). These stocks are Sequenom, Inc. (NASDAQ:SQNM), Protalix BioTherapeutics Inc. (NYSEAMEX:PLX), Sangamo Biosciences, Inc. (NASDAQ:SGMO), ChemoCentryx Inc (NASDAQ:CCXI), and Hyperion Therapeutics Inc (NASDAQ:HPTX). All of these stocks are in the biotechnology industry and their market caps match EBS's market cap.