Is Affymax, Inc. (NASDAQ:AFFY) a first-rate investment now? The smart money is taking a pessimistic view. The number of long hedge fund positions were cut by 4 recently.
In the eyes of most market participants, hedge funds are perceived as slow, outdated investment vehicles of the past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey look at the bigwigs of this club, about 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total asset base, and by monitoring their highest performing investments, we have found a number of investment strategies that have historically outperformed Mr. 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, optimistic insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are a variety of motivations for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).
Now, it’s important to take a peek at the key action surrounding Affymax, Inc. (NASDAQ:AFFY).
What have hedge funds been doing with Affymax, Inc. (NASDAQ:AFFY)?
In preparation for this quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -27% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Cliff Asness’s AQR Capital Management had the biggest position in Affymax, Inc. (NASDAQ:AFFY), worth close to $1.5 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $1.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Ryan Heslop and Ariel Warszawski’s Firefly Value Partners, Israel Englander’s Millennium Management and Paul Tudor Jones’s Tudor Investment Corp.
Judging by the fact that Affymax, Inc. (NASDAQ:AFFY) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedgies that elected to cut their positions entirely in Q1. Intriguingly, Samuel Isaly’s OrbiMed Advisors dumped the biggest stake of the 450+ funds we key on, totaling about $48.9 million in stock., and Jerome Pfund and Michael Sjostrom of Sectoral Asset Management was right behind this move, as the fund said goodbye to about $21.6 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 4 funds in Q1.
What have insiders been doing with Affymax, Inc. (NASDAQ:AFFY)?
Insider buying is best served when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, Affymax, Inc. (NASDAQ:AFFY) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Affymax, Inc. (NASDAQ:AFFY). These stocks are Northwest Biotherapeutics, Inc (NASDAQ:NWBO), Celsion Corporation (NASDAQ:CLSN), Imprimis Pharmaceuticals Inc (NASDAQ:IMMY), NuPathe Inc (NASDAQ:PATH), and Cyclacel Pharmaceuticals Inc (NASDAQ:CYCC). All of these stocks are in the biotechnology industry and their market caps are similar to AFFY’s market cap.