Is Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) a good investment?
To the average investor, there are dozens of indicators market participants can use to analyze their holdings. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outpace their index-focused peers by a healthy margin (see just how much).
Equally as necessary, positive insider trading sentiment is a second way to look at the world of equities. As the old adage goes: there are plenty of incentives for an executive to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this strategy if shareholders understand where to look (learn more here).
Furthermore, it's important to discuss the newest info about Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN).
Heading into Q3, a total of 20 of the hedge funds we track were bullish in this stock, a change of -20% from the first quarter. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes substantially.
When using filings from the hedgies we track, Daniel Gold's QVT Financial had the most valuable position in Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), worth close to $86.9 million, accounting for 5.8% of its total 13F portfolio. The second largest stake is held by Peter Kolchinsky of RA Capital Management, with a $61 million position; 8.1% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Peter Kolchinsky's RA Capital Management, James E. Flynn's Deerfield Management and Jerome Pfund and Michael Sjostrom's Sectoral Asset Management.
Due to the fact Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of money managers that decided to sell off their positions entirely heading into Q2. At the top of the heap, Anand Parekh's Alyeska Investment Group said goodbye to the largest investment of the 450+ funds we monitor, valued at close to $3.5 million in stock, and Jeffrey Vinik of Vinik Asset Management was right behind this move, as the fund cut about $2.6 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 5 funds heading into Q2.
Bullish insider trading is best served when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time frame, Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). These stocks are Dendreon Corporation (NASDAQ:DNDN), China Biologic Products Inc (NASDAQ:CBPO), Clovis Oncology Inc (NASDAQ:CLVS), NPS Pharmaceuticals, Inc. (NASDAQ:NPSP), and Exelixis, Inc. (NASDAQ:EXEL). This group of stocks belong to the biotechnology industry and their market caps are similar to ACHN's market cap.