United Therapeutics Corporation (NASDAQ:UTHR) shareholders have witnessed a decrease in hedge fund interest of late.
At the moment, there are a multitude of metrics market participants can use to monitor publicly traded companies. Two of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can outperform their index-focused peers by a very impressive amount (see just how much).
Just as integral, positive insider trading activity is another way to parse down the marketplace. As the old adage goes: there are plenty of reasons 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 empirical studies have demonstrated the useful potential of this method if "monkeys" know what to do (learn more here).
Consequently, we're going to take a glance at the latest action surrounding United Therapeutics Corporation (NASDAQ:UTHR).
At the end of the fourth quarter, a total of 17 of the hedge funds we track were long in this stock, a change of -15% from the previous quarter. With hedge funds' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, holds the largest position in United Therapeutics Corporation (NASDAQ:UTHR). Sectoral Asset Management has a $78.8 million position in the stock, comprising 2.8% of its 13F portfolio. Sitting at the No. 2 spot is William Leland Edwards of Palo Alto Investors, with a $64.6 million position; 7.6% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Matt Sirovich and Jeremy Mindich's Scopia Capital, Ken Griffin's Citadel Investment Group and Joel Greenblatt's Gotham Asset Management.
Judging by the fact that United Therapeutics Corporation (NASDAQ:UTHR) has witnessed a declination in interest from the smart money, it's safe to say that there was a specific group of funds who were dropping their positions entirely heading into 2013. Interestingly, Matt Sirovich and Jeremy Mindich's Scopia Capital cut the biggest investment of the "upper crust" of funds we watch, worth about $97.7 million in call options, and Peter J. Eichler Jr. of Aletheia Research and Management was right behind this move, as the fund sold off about $20 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds heading into 2013.
Insider purchases made by high-level executives is at its handiest when the company we're looking at has experienced transactions within the past six months. Over the latest six-month time period, United Therapeutics Corporation (NASDAQ:UTHR) has seen 1 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to United Therapeutics Corporation (NASDAQ:UTHR). These stocks are The Medicines Company (NASDAQ:MDCO), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), Endo Health Solutions Inc (NASDAQ:ENDP), Warner Chilcott Plc (NASDAQ:WCRX), and Cubist Pharmaceuticals Inc (NASDAQ:CBST). This group of stocks belong to the drug manufacturers - other industry and their market caps match UTHR's market cap.