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InterMune Inc (ITMN): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

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What’s a smart InterMune Inc (NASDAQ:ITMN) investor to do?

To many market players, hedge funds are perceived as delayed, old financial tools of a period lost to current times. Although there are In excess of 8,000 hedge funds with their doors open currently, Insider Monkey focuses on the masters of this club, around 525 funds. It is assumed that this group has its hands on the majority of the hedge fund industry’s total assets, and by keeping an eye on their highest performing investments, we’ve spotted a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 trumped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as necessary, bullish insider trading activity is a second way to look at the stock market universe. There are many incentives for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this method if piggybackers know what to do (learn more here).

InterMune Inc (NASDAQ:ITMN)

Now that that’s out of the way, we’re going to study the latest info for InterMune Inc (NASDAQ:ITMN).

Hedge fund activity in InterMune Inc (NASDAQ:ITMN)

Heading into Q3, a total of 18 of the hedge funds we track held long positions in this stock, a change of -28% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.

According to our 13F database, Jacob Gottlieb’s Visium Asset Management had the most valuable position in InterMune Inc (NASDAQ:ITMN), worth close to $37.1 million, comprising 0.9% of its total 13F portfolio. On Visium Asset Management’s heels is Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, which held a $29.8 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Daniel Gold’s QVT Financial, Steven Cohen’s SAC Capital Advisors and William Leland Edwards’s Palo Alto Investors.

Due to the fact InterMune Inc (NASDAQ:ITMN) has faced bearish sentiment from the smart money’s best and brightest, it’s easy to see that there is a sect of hedgies that elected to cut their positions entirely heading into Q2. Intriguingly, JΘr⌠me Pfund and Michael Sj÷str÷m’s Sectoral Asset Management said goodbye to the largest stake of all the hedgies we watch, comprising about $43.3 million in stock, and Julian Baker and Felix Baker of Baker Bros. Advisors was right behind this move, as the fund dropped about $15.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 7 funds heading into Q2.

Insider trading activity in InterMune Inc (NASDAQ:ITMN)

Insider buying made by high-level executives is best served when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time frame, InterMune Inc (NASDAQ:ITMN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to InterMune Inc (NASDAQ:ITMN). These stocks are Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), TESARO Inc (NASDAQ:TSRO), Clovis Oncology Inc (NASDAQ:CLVS), China Biologic Products Inc (NASDAQ:CBPO), and Dendreon Corporation (NASDAQ:DNDN). This group of stocks belong to the biotechnology industry and their market caps are closest to ITMN’s market cap.

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