Is VIVUS, Inc. (NASDAQ:VVUS) a good investment today? Money managers are in a pessimistic mood. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
In the financial world, there are tons of methods shareholders can use to track their holdings. Two of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can trounce the broader indices by a superb margin (see just how much).
Equally as integral, positive insider trading sentiment is a second way to break down the stock market universe. Obviously, there are lots of reasons for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this strategy if investors understand where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the latest action encompassing VIVUS, Inc. (NASDAQ:VVUS).
How are hedge funds trading VIVUS, Inc. (NASDAQ:VVUS)?
In preparation for this quarter, a total of 21 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Passport Capital, managed by John Burbank, holds the biggest position in VIVUS, Inc. (NASDAQ:VVUS). Passport Capital has a $105.1 million position in the stock, comprising 4.2% of its 13F portfolio. On Passport Capital’s heels is Daniel Gold of QVT Financial, with a $91.8 million position; the fund has 6.1% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Richard Chilton’s Chilton Investment Company, Ken Griffin’s Citadel Investment Group and Scott McLellan’s Marble Arch Investments.
Due to the fact that VIVUS, Inc. (NASDAQ:VVUS) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that slashed their full holdings last quarter. Intriguingly, Daniel Arbess’s Xerion said goodbye to the largest position of the 450+ funds we track, totaling about $20.8 million in call options, and Kyle Bass of Hayman Advisors was right behind this move, as the fund cut about $20.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about VIVUS, Inc. (NASDAQ:VVUS)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past 180 days. Over the last half-year time frame, VIVUS, Inc. (NASDAQ:VVUS) has experienced zero unique insiders purchasing, 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 VIVUS, Inc. (NASDAQ:VVUS). These stocks are MannKind Corporation (NASDAQ:MNKD), PDL BioPharma Inc. (NASDAQ:PDLI), Sarepta Therapeutics Inc (NASDAQ:SRPT), Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX), and Santarus, Inc. (NASDAQ:SNTS). This group of stocks are in the biotechnology industry and their market caps resemble VVUS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|MannKind Corporation (NASDAQ:MNKD)||6||2||2|
|PDL BioPharma Inc. (NASDAQ:PDLI)||13||0||0|
|Sarepta Therapeutics Inc (NASDAQ:SRPT)||19||0||1|
|Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX)||9||0||0|
|Santarus, Inc. (NASDAQ:SNTS)||15||1||14|
With the returns demonstrated by the aforementioned strategies, everyday investors should always watch hedge fund and insider trading sentiment, and VIVUS, Inc. (NASDAQ:VVUS) applies perfectly to this mantra.