ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) investors should be aware of a decrease in enthusiasm from smart money lately.
To most market participants, hedge funds are viewed as underperforming, outdated financial vehicles of the past. While there are over 8000 funds trading at present, we look at the bigwigs of this club, close to 450 funds. It is estimated that this group controls the majority of the smart money's total asset base, and by tracking their highest performing picks, we have uncovered a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as key, optimistic insider trading activity is another way to break down the stock market universe. There are lots of stimuli for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).
Consequently, we're going to take a glance at the latest action regarding ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD).
At Q1's end, a total of 10 of the hedge funds we track were long in this stock, a change of -17% from the previous quarter. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Julian Baker and Felix Baker's Baker Bros. Advisors had the largest position in ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), worth close to $124 million, accounting for 2.5% of its total 13F portfolio. The second largest stake is held by RA Capital Management, managed by Peter Kolchinsky, which held a $62.2 million position; the fund has 13.3% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Jacob Gottlieb's Visium Asset Management, and Samuel Isaly's OrbiMed Advisors.
Judging by the fact that ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) has faced bearish sentiment from the entirety of the hedge funds we track, it's safe to say that there was a specific group of hedgies that decided to sell off their entire stakes heading into Q2. At the top of the heap, Joseph Edelman's Perceptive Advisors cut the biggest stake of all the hedgies we track, comprising close to $1.9 million in stock., and Glenn Russell Dubin of Highbridge Capital Management was right behind this move, as the fund dumped about $0.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into Q2.
Insider buying is particularly usable when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) has experienced 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).
With the results exhibited by our strategies, everyday investors must always watch hedge fund and insider trading sentiment, and ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) shareholders fit into this picture quite nicely.