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Is Exelixis, Inc. (EXEL) Going to Burn These Hedge Funds?

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Exelixis, Inc. (NASDAQ:EXEL) has experienced a decrease in enthusiasm from smart money in recent months.

If you’d ask most investors, hedge funds are viewed as slow, old financial vehicles of yesteryear. While there are more than 8000 funds in operation at present, we hone in on the leaders of this group, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by monitoring their highest performing picks, we have revealed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Exelixis, Inc. (NASDAQ:EXEL)

Equally as integral, optimistic insider trading activity is another way to parse down the stock market universe. Obviously, there are lots of motivations for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).

Consequently, let’s take a gander at the recent action regarding Exelixis, Inc. (NASDAQ:EXEL).

Hedge fund activity in Exelixis, Inc. (NASDAQ:EXEL)

Heading into Q2, a total of 6 of the hedge funds we track held long positions in this stock, a change of -45% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Jean-Marie Eveillard’s First Eagle Investment Management had the most valuable position in Exelixis, Inc. (NASDAQ:EXEL), worth close to $5.4 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Redmile Group, managed by Jeremy Green, which held a $4.9 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Seeing as Exelixis, Inc. (NASDAQ:EXEL) has witnessed declining sentiment from the smart money, logic holds that there exists a select few fund managers who sold off their full holdings in Q1. It’s worth mentioning that Steven Cohen’s SAC Capital Advisors cut the largest position of all the hedgies we watch, totaling an estimated $3.7 million in stock., and SAC Subsidiary of Sigma Capital Management was right behind this move, as the fund cut about $0.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 5 funds in Q1.

What have insiders been doing with Exelixis, Inc. (NASDAQ:EXEL)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time frame, Exelixis, Inc. (NASDAQ:EXEL) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Exelixis, Inc. (NASDAQ:EXEL). These stocks are Clovis Oncology Inc (NASDAQ:CLVS), Puma Biotechnology Inc (NYSE:PBYI), Celldex Therapeutics, Inc. (NASDAQ:CLDX), NPS Pharmaceuticals, Inc. (NASDAQ:NPSP), and Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). This group of stocks belong to the biotechnology industry and their market caps are similar to EXEL’s market cap.

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