Is it smart to be bullish on Sarepta Therapeutics Inc (NASDAQ:SRPT)?
If you were to ask many of your fellow readers, hedge funds are seen as overrated, old investment vehicles of a period lost to current times. Although there are more than 8,000 hedge funds with their doors open currently, Insider Monkey looks at the leaders of this group, around 525 funds. It is widely held that this group controls most of the hedge fund industry’s total assets, and by tracking their best picks, we’ve formulated a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed 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 trumped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as crucial, bullish insider trading activity is another way to analyze the marketplace. Obviously, there are many stimuli for an insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this tactic if shareholders understand what to do (learn more here).
Now that that’s out of the way, it’s important to study the recent info for Sarepta Therapeutics Inc (NASDAQ:SRPT).
How have hedgies been trading Sarepta Therapeutics Inc (NASDAQ:SRPT)?
At the end of the second quarter, a total of 15 of the hedge funds we track were long in this stock, a change of -21% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
Out of the hedge funds we follow, Joseph Edelman’s Perceptive Advisors had the most valuable position in Sarepta Therapeutics Inc (NASDAQ:SRPT), worth close to $103.5 million, accounting for 10.4% of its total 13F portfolio. On Perceptive Advisors’s heels is Andreas Halvorsen of Viking Global, with a $25.4 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include George Soros’s Soros Fund Management, D. E. Shaw’s D E Shaw and Joseph Edelman’s Perceptive Advisors.
As Sarepta Therapeutics Inc (NASDAQ:SRPT) has witnessed bearish sentiment from the top-tier hedge fund industry, logic holds that there is a sect of money managers who sold off their full holdings at the end of the second quarter. Intriguingly, Sanford J. Colen’s Apex Capital dumped the largest position of all the hedgies we key on, comprising close to $6.5 million in stock. SAC Subsidiary’s fund, Sigma Capital Management, also dropped its stock, about $5.3 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds at the end of the second quarter.
What do corporate executives and insiders think about Sarepta Therapeutics Inc (NASDAQ:SRPT)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time frame, Sarepta Therapeutics Inc (NASDAQ:SRPT) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Sarepta Therapeutics Inc (NASDAQ:SRPT). These stocks are Acorda Therapeutics Inc (NASDAQ:ACOR), Nektar Therapeutics (NASDAQ:NKTR), VIVUS, Inc. (NASDAQ:VVUS), Santarus, Inc. (NASDAQ:SNTS), and Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). This group of stocks are in the biotechnology industry and their market caps match SRPT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Acorda Therapeutics Inc (NASDAQ:ACOR) | 12 | 0 | 0 |
| Nektar Therapeutics (NASDAQ:NKTR) | 10 | 0 | 0 |
| VIVUS, Inc. (NASDAQ:VVUS) | 26 | 0 | 0 |
| Santarus, Inc. (NASDAQ:SNTS) | 21 | 0 | 0 |
| Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) | 4 | 0 | 0 |
Using the returns explained by our tactics, average investors should always track hedge fund and insider trading activity, and Sarepta Therapeutics Inc (NASDAQ:SRPT) shareholders fit into this picture quite nicely.
