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PDL BioPharma Inc. (NASDAQ:PDLI): Insiders Are Dumping, Should You? – Santarus, Inc. (NASDAQ:SNTS), VIVUS, Inc. (NASDAQ:VVUS)

PDL BioPharma Inc. (NASDAQ:PDLI) has experienced a decrease in hedge fund interest recently.

PDL BioPharma Inc. (NASDAQ:PDLI)

In the 21st century investor’s toolkit, there are a multitude of indicators investors can use to track publicly traded companies. Two of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outperform the market by a solid amount (see just how much).

Just as important, positive insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are plenty of incentives for an insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if “monkeys” know where to look (learn more here).

Keeping this in mind, it’s important to take a glance at the key action encompassing PDL BioPharma Inc. (NASDAQ:PDLI).

What have hedge funds been doing with PDL BioPharma Inc. (NASDAQ:PDLI)?

At the end of the fourth quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings significantly.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the largest position in PDL BioPharma Inc. (NASDAQ:PDLI). Renaissance Technologies has a $79 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $26 million position; 0% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Joel Greenblatt’s Gotham Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Since PDL BioPharma Inc. (NASDAQ:PDLI) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds who were dropping their positions entirely at the end of the year. At the top of the heap, Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners sold off the largest investment of the 450+ funds we watch, totaling close to $0 million in stock., and David Costen Haley of HBK Investments was right behind this move, as the fund dumped about $0 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading PDL BioPharma Inc. (NASDAQ:PDLI)?

Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the last half-year time period, PDL BioPharma Inc. (NASDAQ:PDLI) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to PDL BioPharma Inc. (NASDAQ:PDLI). These stocks are Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX), Santarus, Inc. (NASDAQ:SNTS), VIVUS, Inc. (NASDAQ:VVUS), Puma Biotechnology Inc (NYSE:PBYI), and MannKind Corporation (NASDAQ:MNKD). This group of stocks are the members of the biotechnology industry and their market caps are closest to PDLI’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) 7 2 0
Santarus, Inc. (NASDAQ:SNTS) 16 1 12
VIVUS, Inc. (NASDAQ:VVUS) 19 0 0
Puma Biotechnology Inc (NYSE:PBYI) 11 2 0
MannKind Corporation (NASDAQ:MNKD) 8 2 0

With the results demonstrated by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading activity, and PDL BioPharma Inc. (NASDAQ:PDLI) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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