Is Cubist Pharmaceuticals Inc (NASDAQ:CBST)
a buy right now? Prominent investors are taking a bearish view. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
According to most traders, hedge funds are perceived as underperforming, outdated investment vehicles of the past. While there are over 8000 funds in operation at present, we hone in on the crème de la crème of this group, close to 450 funds. It is estimated that this group has its hands on most of the smart money's total asset base, and by monitoring their top stock picks, we have revealed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August
Equally as key, positive insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are plenty of reasons for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if "monkeys" know where to look (learn more here
Consequently, let's take a look at the key action encompassing Cubist Pharmaceuticals Inc (NASDAQ:CBST
Hedge fund activity in Cubist Pharmaceuticals Inc (NASDAQ:CBST)
At year's end, a total of 18 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedgies' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Citadel Investment Group
, managed by Ken Griffin, holds the most valuable position in Cubist Pharmaceuticals Inc (NASDAQ:CBST). Citadel Investment Group has a $43 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is William Leland Edwards of Palo Alto Investors
, with a $35 million position; 0.5% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include D. E. Shaw's D E Shaw
, Israel Englander's Millennium Management
and Jeffrey Vinik's Vinik Asset Management
Judging by the fact that Cubist Pharmaceuticals Inc (NASDAQ:CBST) has experienced declining sentiment from hedge fund managers, it's safe to say that there was a specific group of hedge funds who sold off their positions entirely in Q4. Intriguingly, Donald Chiboucis's Columbus Circle Investors
sold off the biggest position of all the hedgies we track, comprising about $18 million in stock.. Richard Schimel's fund, Diamondback Capital
, also sold off its stock, about $7 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Cubist Pharmaceuticals Inc (NASDAQ:CBST)?
Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, Cubist Pharmaceuticals Inc (NASDAQ:CBST) has experienced zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here
With the returns demonstrated by our strategies, everyday investors must always monitor hedge fund and insider trading activity, and Cubist Pharmaceuticals Inc (NASDAQ:CBST) shareholders fit into this picture quite nicely.
Click here to learn more about Insider Monkey's Hedge Fund Newsletter
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.