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Is Aegerion Pharmaceuticals, Inc. (AEGR) Going to Burn These Hedge Funds?: Impax Laboratories Inc (IPXL), Pacira Pharmaceuticals Inc (PCRX)

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Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) was in 14 hedge funds’ portfolio at the end of December. AEGR has experienced an increase in enthusiasm from smart money in recent months. There were 6 hedge funds in our database with AEGR positions at the end of the previous quarter.

Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)

In the eyes of most shareholders, hedge funds are assumed to be underperforming, outdated financial vehicles of years past. While there are over 8000 funds in operation at present, we hone in on the masters of this group, close to 450 funds. It is estimated that this group oversees most of all hedge funds’ total asset base, and by paying attention to their top stock picks, we have come up with 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 began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Just as integral, bullish insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are a variety of reasons for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand where to look (learn more here).

Consequently, let’s take a gander at the recent action encompassing Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR).

How have hedgies been trading Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)?

In preparation for this year, a total of 14 of the hedge funds we track held long positions in this stock, a change of 133% from the third quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.

Of the funds we track, Joseph Edelman’s Perceptive Advisors had the biggest position in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR), worth close to $66.4 million, accounting for 11.7% of its total 13F portfolio. Coming in second is Mark Kingdon of Kingdon Capital, with a $15.9 million call position; the fund has 1% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Julian Baker and Felix Baker’s Baker Bros. Advisors, Mark Kingdon’s Kingdon Capital and Mark Broach’s Manatuck Hill Partners.

Now, key money managers have jumped into Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) headfirst. Kingdon Capital, managed by Mark Kingdon, created the biggest call position in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR). Kingdon Capital had 15.9 million invested in the company at the end of the quarter. Mark Kingdon’s Kingdon Capital also initiated a $7.1 million position during the quarter. The following funds were also among the new AEGR investors: Richard Driehaus’s Driehaus Capital, Ken Griffin’s Citadel Investment Group, and SAC Subsidiary’s CR Intrinsic Investors.

How are insiders trading Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)?

Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the last 180-day time period, Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) has seen 3 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR). These stocks are Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), Intercept Pharmaceuticals Inc (NASDAQ:ICPT), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), Pacira Pharmaceuticals Inc (NASDAQ:PCRX), and Impax Laboratories Inc (NASDAQ:IPXL). This group of stocks belong to the drug manufacturers – major industry and their market caps resemble AEGR’s market cap.

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