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Is Celgene Corporation (CELG) Going to Burn You?

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Will Celgene Corporation (NASDAQ:CELG) burn you? Here’s some data to help answer that question.

To many traders, hedge funds are perceived as overrated, outdated investment tools of a forgotten age. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey looks at the leaders of this group, close to 525 funds. It is widely held that this group oversees the majority of the smart money’s total capital, and by paying attention to their best picks, we’ve uncovered a number of investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outperformed 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as key, positive insider trading activity is a second way to look at the financial markets. Obviously, there are a number of motivations for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this tactic if “monkeys” understand where to look (learn more here).

Furthermore, it’s important to examine the newest info about Celgene Corporation (NASDAQ:CELG).

What have hedge funds been doing with Celgene Corporation (NASDAQ:CELG)?

At the end of the second quarter, a total of 43 of the hedge funds we track were bullish in this stock, a change of -2% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.

Celgene Corporation (NASDAQ:CELG)When using filings from the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Celgene Corporation (NASDAQ:CELG), worth close to $262 million, comprising 0.7% of its total 13F portfolio. On Renaissance Technologies’s heels is D. E. Shaw of D E Shaw, with a $169.2 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Samuel Isaly’s OrbiMed Advisors, Cliff Asness’s AQR Capital Management and Bill Miller’s Legg Mason Capital Management.

Because Celgene Corporation (NASDAQ:CELG) has faced a fall in interest from upper-tier hedge fund managers, we can see that there were a few hedgies that decided to sell off their positions entirely at the end of the second quarter. It’s worth mentioning that Andreas Halvorsen’s Viking Global dropped the largest stake of the “upper crust” of funds we track, totaling about $49.4 million in stock, and Ken Heebner of Capital Growth Management was right behind this move, as the fund sold off about $32.5 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds at the end of the second quarter.

Insider trading activity in Celgene Corporation (NASDAQ:CELG)

Bullish insider trading is most useful when the company in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Celgene Corporation (NASDAQ:CELG) has seen 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Celgene Corporation (NASDAQ:CELG). These stocks are Regeneron Pharmaceuticals Inc (NASDAQ:REGN), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), Amgen, Inc. (NASDAQ:AMGN), Gilead Sciences, Inc. (NASDAQ:GILD), and Biogen Idec Inc. (NASDAQ:BIIB). This group of stocks are in the biotechnology industry and their market caps resemble CELG’s market cap.

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