Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) shareholders have witnessed an increase in activity from the world's largest hedge funds of late.
To the average investor, there are a multitude of indicators market participants can use to watch publicly traded companies. A pair of the most useful 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 solid margin (see just how much).
Equally as integral, positive insider trading sentiment is a second way to parse down the investments you're interested in. As the old adage goes: there are lots of motivations for a corporate insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if investors know where to look (learn more here).
With these "truths" under our belt, let's take a gander at the recent action regarding Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA).
At the end of the first quarter, a total of 30 of the hedge funds we track held long positions in this stock, a change of 36% from one quarter earlier. With the smart money's positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes significantly.
Of the funds we track, Jerome Pfund and Michael Sjostrom's Sectoral Asset Management had the biggest position in Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA), worth close to $73.8 million, accounting for 2.3% of its total 13F portfolio. The second largest stake is held by Dan Loeb of Third Point, with a $49.7 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Phill Gross and Robert Atchinson's Adage Capital Management, Julian Baker and Felix Baker's Baker Bros. Advisors and Donald Chiboucis's Columbus Circle Investors.
As one would reasonably expect, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, initiated the biggest position in Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA). Millennium Management had 10.7 million invested in the company at the end of the quarter. James E. Flynn's Deerfield Management also initiated a $5.5 million position during the quarter. The other funds with brand new ARIA positions are Glenn Russell Dubin's Highbridge Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Louis Bacon's Moore Global Investments.
Insider trading activity, especially when it's bullish, is best served when the company in focus has experienced transactions within the past half-year. Over the last half-year time period, Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) has experienced zero unique insiders buying, and 11 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 Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA). These stocks are Theravance Inc (NASDAQ:THRX), Seattle Genetics, Inc. (NASDAQ:SGEN), Incyte Corporation (NASDAQ:INCY), Medivation Inc (NASDAQ:MDVN), and Jazz Pharmaceuticals plc - Ordinary Shares (NASDAQ:JAZZ). This group of stocks are the members of the biotechnology industry and their market caps are similar to ARIA's market cap.