Is Orexigen Therapeutics, Inc. (NASDAQ:OREX) ready to raly soon? Money managers are becoming less hopeful. The number of long hedge fund bets decreased by 3 in recent months.
To the average investor, there are a multitude of indicators shareholders can use to watch the equity markets. A duo of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can outclass their index-focused peers by a significant amount (see just how much).
Just as beneficial, bullish insider trading activity is another way to parse down the marketplace. Just as you’d expect, there are many incentives for an executive to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this tactic if investors understand what to do (learn more here).
With all of this in mind, let’s take a gander at the recent action surrounding Orexigen Therapeutics, Inc. (NASDAQ:OREX).
How are hedge funds trading Orexigen Therapeutics, Inc. (NASDAQ:OREX)?
At the end of the fourth quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of -16% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Christopher MedlockáJames’s Partner Fund Management had the biggest position in Orexigen Therapeutics, Inc. (NASDAQ:OREX), worth close to $12 million, comprising 0.5% of its total 13F portfolio. On Partner Fund Management’s heels is Visium Asset Management, managed by Jacob Gottlieb, which held a $11 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Steven Cohen’s SAC Capital Advisors, Phill Gross and Robert Atchinson’s Adage Capital Management and Donald Chiboucis’s Columbus Circle Investors.
Judging by the fact that Orexigen Therapeutics, Inc. (NASDAQ:OREX) has witnessed bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of hedge funds that decided to sell off their entire stakes last quarter. Interestingly, Joseph Edelman’s Perceptive Advisors dropped the biggest position of the “upper crust” of funds we key on, worth about $4 million in stock.. Richard Schimel’s fund, Diamondback Capital, also cut its stock, about $1 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds last quarter.
How have insiders been trading Orexigen Therapeutics, Inc. (NASDAQ:OREX)?
Insider buying is most useful when the company in question has experienced transactions within the past half-year. Over the latest half-year time period, Orexigen Therapeutics, Inc. (NASDAQ:OREX) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
With the returns exhibited by the aforementioned studies, retail investors must always watch hedge fund and insider trading activity, and Orexigen Therapeutics, Inc. (NASDAQ:OREX) is an important part of this process.
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