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Here is What Hedge Funds Think About Sequenom, Inc. (SQNM)

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Sequenom, Inc. (NASDAQ:SQNM) has seen a decrease in hedge fund interest in recent months.

To most traders, hedge funds are seen as worthless, outdated investment tools of the past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the elite of this club, close to 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing picks, we have spotted a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Sequenom, Inc. (NASDAQ:SQNM)Just as key, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are a variety of stimuli for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action encompassing Sequenom, Inc. (NASDAQ:SQNM).

Hedge fund activity in Sequenom, Inc. (NASDAQ:SQNM)

At the end of the first quarter, a total of 17 of the hedge funds we track were long in this stock, a change of -6% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, William Leland Edwards’s Palo Alto Investors had the biggest position in Sequenom, Inc. (NASDAQ:SQNM), worth close to $35.5 million, accounting for 4.2% of its total 13F portfolio. Coming in second is Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, which held a $24.6 million position; 0.8% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include SAC Subsidiary’s CR Intrinsic Investors, Steven Cohen’s SAC Capital Advisors and Samuel Isaly’s OrbiMed Advisors.

Because Sequenom, Inc. (NASDAQ:SQNM) has experienced falling interest from hedge fund managers, we can see that there lies a certain “tier” of hedgies who were dropping their positions entirely at the end of the first quarter. At the top of the heap, Jeremy Green’s Redmile Group said goodbye to the largest investment of the “upper crust” of funds we key on, totaling an estimated $12.6 million in stock.. SAC Subsidiary’s fund, CR Intrinsic Investors, also said goodbye to its call options., about $1.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds at the end of the first quarter.

Insider trading activity in Sequenom, Inc. (NASDAQ:SQNM)

Bullish insider trading is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time frame, Sequenom, Inc. (NASDAQ:SQNM) has seen 2 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Sequenom, Inc. (NASDAQ:SQNM). These stocks are ChemoCentryx Inc (NASDAQ:CCXI), Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), Hyperion Therapeutics Inc (NASDAQ:HPTX), Emergent Biosolutions Inc (NYSE:EBS), and Idenix Pharmaceuticals Inc (NASDAQ:IDIX). This group of stocks belong to the biotechnology industry and their market caps are similar to SQNM’s market cap.

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