Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) investors should pay attention to an increase in activity from the world's largest hedge funds recently.
In the 21st century investor’s toolkit, there are a multitude of metrics investors can use to monitor stocks. A duo of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce the broader indices by a significant margin (see just how much).
Equally as integral, bullish insider trading sentiment is another way to break down the investments you're interested in. Just as you'd expect, there are a variety of incentives for an insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if investors understand what to do (learn more here).
Consequently, it's important to take a gander at the recent action regarding Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX).
At the end of the first quarter, a total of 9 of the hedge funds we track were long in this stock, a change of 29% from the previous quarter. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). Royce & Associates has a $9.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Joseph Edelman of Perceptive Advisors, with a $7 million position; 0.8% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Steven Cohen's SAC Capital Advisors, Mario Gabelli's GAMCO Investors and Ken Griffin's Citadel Investment Group.
Now, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, created the largest position in Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). Citadel Investment Group had 0.3 million invested in the company at the end of the quarter. Matthew Tewksbury's Stevens Capital Management also initiated a $0 million position during the quarter. The only other fund with a brand new LXRX position is Israel Englander's Millennium Management.
Insider purchases made by high-level executives is at its handiest when the company in focus has seen transactions within the past half-year. Over the latest half-year time period, Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). These stocks are Nektar Therapeutics (NASDAQ:NKTR), PDL BioPharma Inc. (NASDAQ:PDLI), Sarepta Therapeutics Inc (NASDAQ:SRPT), VIVUS, Inc. (NASDAQ:VVUS), and Santarus, Inc. (NASDAQ:SNTS). This group of stocks are the members of the biotechnology industry and their market caps resemble LXRX's market cap.